He has produced some dazzling displays for both club and country in his favoured role wide on the right, but Redknapp believes he could also flourish in a more advanced, central position.
"We actually played him just in behind the strikers at Chelsea," the manager told Hotspur magazine.
"I'd seen him play well in that role before and there's no doubt that he can play there so it's good to have that versatility up your sleeve.
"But he's playing fantastically well at the moment, in his regular position wide on the right, and it's his form there that's got him into the England squad.
"But, as I say, the lad gives us options and that's important."
Lennon has added more goals to his game this term and has also looked more composed when he has had the chance to create something for one of his team-mates.
Redknapp insists there is still room for improvement and he is confident Lennon will go on to become the finished article.
"He can become very, very good. He's already an excellent player and his pace is frightening," enthused Redknapp. "His is a difficult position to play in because you also have to be aware of your defensive responsibilities so he's got to keep learning and improving.
"But, to give him his due, he is doing that and working hard at his game. He has improved his final ball, for example, and I firmly believe that he can become a top player. We're here to help him and will do all we can but, in the final analysis, it's down to him."