Holtby, a full Germany international and current captain of the Under-21 side, has announced that he will leave Schalke in the summer and it is thought the midfielder would favour a move to England, where his father Chris grew up in Liverpool.
Tottenham and Arsenal are both understood to have watched the player and recent reports suggest Spurs are in pole position to sign Holtby when his contract expires.
Freund has not coached Holtby directly, but he is well aware of the midfielder's talents from his days as a youth coach with the German national side.
Although Freund was reluctant to speak too much about the player given that Spurs have been linked with him, the coach did concede the midfielder is well cut out for English football.
"For Lewis it will not be a problem," Freund said. "He is half-English, he loves the Premier League.
"He is captain of the Under-21s for Germany, he will lead the team at the European Championship in Israel.
"He is out of contract... I don't have to say any more!
"I worked for under-16s and under-17s for the last three years, that is why I don't know him really well but what I can say is that he is a really good player."
Freund's return to England has rekindled his love affair with the FA Cup.
During five seasons at Tottenham Freund made the semi-finals of the competition twice, first in 1999 when Spurs lost to Newcastle in extra time and then two years later when they were defeated by local rivals Arsenal.
Although Freund won the League Cup with Spurs 14 years ago, the former midfielder is still gutted he did not experience stepping out at Wembley for an FA Cup final.
"We lost in the semi-finals to Newcastle in 1999 and I have to say that I'm still disappointed," Freund said.
"If we could have played an FA Cup Final at Wembley... I can't say nothing is bigger than that but it is definitely a fantastic moment for anyone who has played the game."
Tottenham face npower League One side Coventry on Saturday as they look to reach their first final since they lifted their eighth cup in 1991.
The Londoners came close to reaching the final last season, but they were undone by a 5-1 semi-final thrashing by Chelsea.
With Spurs having climbed to third in the Barclays Premier League after finding their feet under Andre Villas-Boas, Freund hopes the squad can transfer their form to the cup.
"We are strong enough now as a club to say maybe it's time to win the FA Cup again," Freund added.
"We have a fantastic history in the competition."
Villas-Boas is expected to hand long-term injury absentees Benoit Assou-Ekotto and Scott Parker starts on Saturday and a number of squad players will also be given a chance.
Their opponents beat Spurs in the 1987 final, but have fallen from grace since.
Coventry now sit 11th in League One, 52 places below Spurs in the league ladder, but Freund insists they will not take the opposition lightly.
He said: "I know they lost their last game (against Shrewsbury) but before that they were 10 unbeaten and that is why it will be a really hard game.
"They will come to the Lane with nothing to lose."