Telfer signed a three-year deal with United after leaving Rangers earlier this week and is now preparing to make his mark for Jackie McNamara's side when the new SPFL Premiership season gets underway.
Campbell, who has been responsible for the development of talented young players such as John Souttar and Ryan Gauld in recent times, is a big admirer of midfield playmaker Telfer and insists other players should be relishing the opportunity to show they are as good as Scotland under-19 international Telfer.
Campbell said: "I know him through seeing him in the Scotland under-19 team and our team having played Rangers twice last season. He is a player who caught the eye and I think he will be a good addition to the United squad.
"We have good, young, talented players who are desperate to progress and make it into the first team here. Charlie is another one of them now. From our point of view, bring it on because we are looking for more competition.
"We have a good set-up here but have gone outwith the club to get him. There are two ways for the others to react to that. You can say, 'I can't believe they have gone to another club to sign someone' or you can say 'right, I am going to make sure he is not going to take my place'.
"The second reaction is what I will be telling the boys is the right one because that is the highly competitive business they are in."
Campbell believes Telfer's decision to leave Ibrox after 10 years is down to McNamara's track record in proving he will give youngsters the chance to shine. He said: "That says a lot about what Jackie is doing in general. I think we had 10 academy players in the first team at different points over the season. So players are looking at United and seeing there is a real pathway to the first team."
Rangers are due compensation for 18-year-old Telfer but Campbell is sure it will be money well spent. He said: "It is probably a unique situation that we are in, paying money to such a massive club as Rangers. It will be quite an eye-opener to quite a few people, myself included.
"I did know it was a possibility and I know the lad. I know the type that he is and that he will fit in well here. Three of our guys [Gauld, Souttar and Darren Petrie] have been away with the Scotland under-19s and they say he is exactly the kind of guy who will fit in at Tannadice no problem."
A second former Rangers youth player will sign for Dundee United this week after Blair Spittal confirmed that he was turning down the chance to join Dundee.
The 18-year-old attacking midfielder will join up with Telfer at Tannadice by the end of the week after agreeing his release from Queen's Park, where he has starred in the last two seasons.
Spittal was with Rangers until the under-15 age group when he was released and picked up by Queen's Park, who played him in their first team aged 16. He has opted for United after being impressed by the way his former Hampden team-mate, Andrew Robertson, has progressed to the national team.
Robertson only moved to United last summer and, within a year of making the switch, he is starting for Scotland.
His rapid development has persuaded Spittal to choose United ahead of their Dens Park rivals in a move that will disappoint their manager, Paul Hartley, who is a long-time admirer.