Rusedski thinks Nadal is 'missing something' by not winning the tournament in previous years and that he will be desperate to add a triumph to his resume.
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Speaking exclusively to RadioTimes.com, Rusedski said: "It's so important, after the Slams, if you're a great and you don't have this in your pocket, then you're missing something.
"For Rafa, you're the guy who's missing this the most. It's something in your resume that you desperately want to win.
"For Alexander Zverev it was the biggest title he has won, for Stefanos Tsitsipas last year. Most guys who win this win multiple Majors, go on to be number one in the world so it's a massive event.
"I'd like to see Rafa get that title because he kind of deserves it with everything he's accomplished and I think it could be one of his greatest accomplishments – along with those 13 French Opens – to win it indoors, in London, the last year we've had it."
While Rusedski would love to see Nadal finally claim the ATP Finals prize, he is cautious about his chances despite being fresher than usual at this time of year.
"Rafa comes here the freshest he's ever been. He usually talks about how exhausted he is by the end of the season and it comes too late in the calendar but he doesn't have this excuse this year.
"The problem is for Rafa though that the return was a little too short in Paris. His serve wasn't firing well enough, the court surface just doesn't give him enough height and bounce and kick so I don't really put him as my favourite for the event.
"This indoor surface is a little bit too tough for him at the moment to win indoors in London, but he's an unbelievable competitor and he will want to improve those two areas in Paris that let him down: the return of serve as well as serving better.
"Those are the two aspects he has to do better this week."
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