The German took over from Frank Lampard midway through the season, and has steered them to an FA Cup final, Champions League semi-final, and within range of the top four in the Premier League.
Sidwell, who used to play for Chelsea, is currently under-16s coach at Brighton.
"While I was disappointed to see Frank Lampard lose his job, the hierarchy made a calculated risk in changing manager but it's one that I'm confident will pay off," Sidwell said ahead of Brighton's clash with Chelsea on Tuesday.
"While you always get a reaction from players after a new man comes in, Chelsea have built up a real head of steam.
"From what I've seen they look more structured; they're less open defensively and more fluid from back to front – and are benefiting from a manager who we know has bundles of experience from his time at PSG and Borussia Dortmund.
"That bodes well for the future but, more immediately, I'm sure they'll make the top four this season and, for me, they're the team to beat in the Champions League.
"I fancy them going all the way and if you look at their squad, aside from Manchester City, it's probably the best in England and possibly Europe. The Chelsea team that won it in 2012 were nowhere near favourites, and although more will be expected this time, in these one-off games they've got every chance. What was looking like a difficult season is now looking very promising."