He was dogged by injury and illness problems last season when expected to play a major part in Birmingham's bid to regain their Premier League status - which they ultimately achieved.
But, after the disappointment of missing out on Scotland's World Cup clash with Norway, McFadden looked sharp against Manchester United and Portsmouth and McLeish is confident he can have "a big season" at St Andrews.
His last-gasp penalty earned City their first victory of the campaign against Pompey on Wednesday after a single goal reversal at Old Trafford.
McLeish said: "James is a key figure here at St Andrews. We know he didn't scale the heights in terms of the expectation levels for a player of his ability last season.
"But there were reasons, illness and injuries, and he never quite got a consistent season under his belt.
"Since he has been in England, he has never played a full season because of playing a bit part with Everton and being rotated by David Moyes.
"This season is a big one for James. We are working hard with the fitness coaches to give the players all individual programmes and James is one we are paying special attention to.
"I know if James is top fit, and that includes everything, diet, life-style, he can be a top player. He will be some player for this club."
McLeish is looking for his side to build on their mid-week win when they entertain Stoke on Saturday.
He said: "To get the first win on the board is very important. It eases the pressure, you feel a sense of relief.
"I know I would still be talking in positive terms had we not got off the mark and you have to see that cup is always half full.
"But there is no doubting what an early win does for you.
"It is a confidence booster. I know Portsmouth have had things to deal with off the pitch but they still had a side full of good players.
"That team had household Premier League names, players far more experienced than our players."
With Cameron Jerome struggling to overcome an ankle injury, McLeish is weighing up whether to give a full debut to record signing Christian Benitez.
He needs match sharpness after his lay off following shoulder surgery but has impressed as a substitute against the Red Devils and Pompey.
McLeish said: "We have seen glimmers of him and some good little things from him. Playing him in a full game is going to be the next step for him.
"Then we will be able to assess more how good he is at keeping the ball, how good he is at retaining possession, can he get at defenders, can he steal things from defenders.
"We have seen bits of his great pace and defenders will be scared to death of him.
"He has fantastic ability to turn with a defender close to him and make space for a shot or put someone else in and that is going to be a very potent weapon.
"He played yesterday in a practice match and got another 45 minutes under his belt but he has played less than 90 minutes in four months."
In addition to Jerome, McLeish must test the fitness of left-back Gregory Vignal who suffered a hip injury against Paul Hart's side during the second half.
Birmingham v Stoke 1st Goalscorer: McFadden, J. 15/2