Nicol, now in charge of New England Revolution, spent 14 years at Anfield, during which time he won five league titles, three FA Cups and the European Cup.
Liverpool have not finished top since Nicol was part of their 18th championship success in 1990 and now Henry has come in to steer the club through the choppy waters created by the George Gillett and Tom Hicks era.
American dream: New England boss Steve Nicol believes John Henry is the right man for his old club Liverpool
Nicol is well acquainted with the way Henry works given he has spent nearly the last 10 years in Boston as coach of the MLS outfit.
Henry is an even bigger player in the city given the Boston Red Sox are also in his sporting portfolio. And, having studied how the American has run his baseball team, Nicol is confident Liverpool are destined for a brighter period.
'John Henry is the right man,' he said. 'You only need to look at what he has done with the Red Sox.
Top of the Kop: Liverpool owner John W Henry
'They were in a similar situation to the one Liverpool were in when he took over there. The team wasn't doing particularly well and the ground was a bit run down. Look at it now. The stadium is fantastic - you can't buy a seat in the place. And the team are the world champions.
'Let's hope Liverpool turn round and do exactly the same thing.'
According to Nicol, Henry has already performed one masterstroke in bringing back his former team-mate, and fellow Scot, Kenny Dalglish as manager.
'The spirit had disappeared for a little while,' he said. 'The players and the fans were all a bit low. Kenny has brought that back. The morale is sky high.
'He did a great job in the second half of the season. Now they have to kick on. It is really important they get off to a good start in the first four or five games of the Premier League. If they do that, they can sustain it for the whole season.
'Anyone with a Liverpool connection would love to win the league. Is it realistic? Probably not. But you never know. A couple of good signings could make a big difference.'
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