Downing's decision came only weeks after Brazilian striker Afonso Alves became the club's record signing and helped spark a fresh wave of optimism with relegation fears giving way to dreams of FA Cup glory.
He believes Alves' capture did Boro little harm in persuading Downing to sign on the dotted line, and in turn, he is confident that will have a knock-on effect.
Southgate said: "Players that you are looking to bring to the club will look at players like Stewart Downing and feel he is a player they would want to come and play with.
"And within our own dressing room, it is important players realise they can stay here and be looked after here.
"Stewart has probably signed four or five contracts in his time here, and it is important we are seen to be looking after our own young players in the right way, and that we are able to keep hold of them if it is something we as a club want to do."