Giovanni di Stefano said the late Yugoslav president allowed him to stay in his home, gave him an honorary doctorate of law from Belgrade's university and made him a Yugoslav citizen.
During this time he struck up a relationship with Milosevic's daughter.
He said the former leader, who died before his trial for war crimes concluded, invited him to stay in 1993.
"Slobodan Milosevic liked me very, very much," he told Southwark Crown Court.
Di Stefano, 57, who earned his Devil's Advocate nickname for taking on "unwinnable" cases, is accused of tricking people into thinking he was a legal professional, when in fact he was not a qualified lawyer.
He yesterday told the court Milosevic had given him a doctorate of law simply because he had asked. The man also introduced him to former Iraqi leader Saddam Hussein in 1998 and said he was present when UN inspectors were looking for weapons of mass destruction. That year, he was also introduced to bin Laden, he told the court.
Asked if he had any dealings with Mugabe during his career, he replied: "Of course, yes, I knew him, know him." Questioned over the precise nature of their relationship, he said there were money transfers made to Zimbabwe.
The 57-year-old, of Canterbury, Kent, faces 25 charges including deception, fraud and money laundering between 2001 and 2011. He denies the charges.
The trial continues.