Lord Coe, who was in Queenstown to attend the Oceania National Olympic Committee annual meeting, won two 1500m gold medals and two 800m silver medals at back-to-back Olympics, in 1980 and 1984.
Lord Coe has been keeping a close eye on New Zealand runner Willis, a bronze medallist in Beijing last year, and believes he has the potential to win gold in London in 2012.
"There is absolutely no reason why not," he said. "If he believes it, then he can. That is the nature of human endeavour. If you believe it, anything is possible. Nobody else can set your dreams; they are yours.
"I've watched him with great pleasure because it is great that he has been competitive with the Africans. He follows in a pretty fine tradition, well, a very fine tradition."
Lord Coe has a soft spot for New Zealand athletics.
During his formative years on the athletics circuit a young Coe often found himself rooming with New Zealand runners John Walker, Rod Dixon and Dick Quax.
Walker had a profound influence on his career.
When Filbert Bayi and Walker both went under the world record time for the 1500m in Christchurch in 1974, Coe was watching the event on television on the other side of the world.
"I remember sitting at home watching this . . . sitting there with my coach in complete silence at the end of the race. He turned to me and said, `You do realise that middle-distance running will never be the same'."
Coe was rooming with the trio when he broke the world 800m record and the world record for the mile a week apart in 1979.
Coe's time has been beaten, but the four-minute mile remains a stumbling block for many athletes.
During a conversation with Roger Bannister, who became the first man to break the 4min barrier in May, 1954, Bannister reminded Coe more people had climbed Mt Everest than gone under 4min.
