The Germany international moved to Newcastle from AC Milan and has quickly caught the eye in both the Premier League and Champions League this season.
Simpson told Tribalfootball.com: "He looks assured at the back; he has a strong presence and looks to be a bargain indeed. This is the type of player Newcastle need to recruit to compete well in the Premier League.
"To come into the team and play like he is, it’s a credit to the recruitment team and obviously the manager as well. Newcastle have big ambitions and to bring in a player at such a key position, he is performing really well and impressing in each game.
"It’s so important to have a good spine to the team and he can be a player Newcastle look to in defence to help them keep clean sheets and with the likes of (Anthony) Gordon and (Harvey) Barnes, they have played to score goals at the business end of the pitch."
Meanwhile, on claims from former Manchester United star Paul Scholes that Sandro Tonali is the best midfielder currently in the Premier League, Simpson isn't so sure.
He said, "That is a big statement indeed. He is a very good midfielder and has had a very strong impact in Newcastle’s team since joining. You look at Newcastle’s consistency with getting into the Champions League and then winning the League cup last year.
"He has been a big part to their story and a very good midfielder. I don’t think he is the best midfielder in the League right now. There are definitely ones who are better. Declan Rice is having a big impact at Arsenal, plus there are holding midfielders and goal scoring midfielders."
- Danny Simpson was speaking to Tribalfootball on behalf of William Hill