Johnston has held talks with Killie chairman Michael Johnston over succeeding Kenny Shiels and is considering whether to take up the offer after leading Queen of the South to the Second Division title and the Ramsdens Cup.
Kyle said: “I wish him all the best in whatever decision he makes.
“It just shows you what you can do. He has worked a year at Queen of the South, got them promoted with a record number of points and has helped some good young players, like Nicky Clark, who has now moved on.
“I’m sure he can do the same at Kilmarnock. He has got a hunger for it and he has got good experience from the clubs he has been at as a player.”
Kyle, who turned down an offer to join Queens last summer in favour of joining Rangers, recognised Johnston’s coaching potential early in his career.
The former Hearts forward, who is now looking for a new club after recovering from an ankle injury, said: “I was at Sunderland when Allan Johnston was there, so I had spent a good three or four years with Sticky down there and when I came up to Kilmarnock he was there as well.
“He is a top, top guy. As a footballer he was different class and you always knew he was going to be one of those players, he would take it on to the next level and become a manager.
“It’s hard to explain, you just know some guys will be managers.
“Five years ago, people would have said ‘no way that Kevin Kyle is going to be a manager, he’s off his head’.
“But I did my coaching badge last week and I really, really enjoyed it. I have taken that next step to try and be a coach.
“I saw Allan at Kilmarnock toward the end of his career and he was helping out at training, so you could see he was going to be a coach.
“He has a good guy beside him in Sandy Clark, who I thought was really good at Kilmarnock. Sometimes that helps as well.”