Fed Cup captain Murray, mother of Andy and Jamie, has backed British number one Watson to continue her 2014 resurgence by stealing a first career victory against one of the world's top 10.
Watson struggled with glandular fever last year, but overcame world number 12 Flavia Pennetta to reach last week's semi-finals at Eastbourne.
Now Murray has backed the Guernsey-born 22-year-old to follow up her straight-sets first-round victory over Ajla Tomljanovic against Kerber at the All England Club on Thursday.
"The way she has recovered from her illness, it definitely can help," said Murray, ahead of Watson's second-round clash with the current world number seven.
"She wasn't able to put in the hours on court and in the gym she would have liked last year, so she knows what that feels like and it's frustrating.
"But it took her a long time to get over that.
"Once you've experienced that, you appreciate much better feeling fit and healthy.
"She's been up in the top 40 before, she's beaten some top players before, she has to do that on a consistent basis, and that's about getting your head and your body in the right place for much longer periods of time.
"So I think she's aware of what she has to do now, and I'm just very happy to see her getting back to where she was before.
"And I think she has a lot more to offer.
"You don't always appreciate what you've got until you haven't got it, and I think she will have learned a lot from that in the last year, and she'll be ready to move forward."
Watson has overtaken the injured Laura Robson as Britain's number one, and assumed the mantle as the home nation's chief women's hope in the process.
Providing Watson employs shrewd tactics, Murray feels she will have the confidence and the power to cause problems for 26-year-old German Kerber, who was runner-up at Eastbourne.
"For the last six or seven weeks she's started to show some really good form, she's moving really well," said Murray at a Lavazza Coffee event.
"She had a really difficult year last year with the glandular fever where she wasn't able to train the way she would have wanted, she didn't have the energy.
"This year I think she's getting back towards her best form, so I'm hoping she's going to have a good run here.
"I don't see any reason why she can't win again, she's moving well and if she gets into the right places, in that she has a good game plan, then I don't see any reason why not.
"The grass suits her, she defends well, absorbs the ball well, so she has to get her head down and a play a smart tactical game.
"It's good because last year was so tough for her, so it's great to see her out there and playing well again."