Former Parkhead midfielder and Hibernian boss Collins, 42, has been out of work since leaving Charleroi last summer.
"There's a big job in Glasgow, but I would imagine they would be going for somebody a bit more experienced than myself," Collins told BBC Radio Five Live. "But it is a big job for somebody, a big challenge."
Lennon was named interim boss last month following Tony Mowbray's sacking and although he has won all four of his SPL games in charge, Celtic suffered a shock Active Nation Scottish Cup semi-final defeat to Ross County.
"That was the one that was a poor defeat and a poor performance, but he has had four league victories on the bounce, so you never know," said Collins.
"If he goes from now until the end of the season winning every game, he might have a chance."
If Lennon were to miss out, Collins believes Celtic will struggle to tempt anyone from the Premier League or any top-class manager.
"I think they have got to be realistic now," Collins said. "I don't think they are going to pull anybody away from the Premiership.
"There has been talk of Mark Hughes, who I think would be a good choice - I think a terrific manager.
"But I am sure Mark Hughes would prefer to stay in the English Premiership.
"Do they go for a foreign manager? It is always an option, but it is a tough one: are the big boys going to want to go to Glasgow? I don't think so."
Asked when he expected to return to management, Collins said: "Soon hopefully, but at this moment in time, nothing definite."