Pardew, whose Newcastle side host the south coast club on Saturday in a clash of the Premier League surprise packages, bought Lambert from Bristol Rovers while in charge of the then League One side in 2009.
"I never believed Rickie was too old to make it," Pardew said.
"His technical ability was always immense but he's certainly improved since I had him."
Lambert has scored in all four of England's league divisions and Pardew said the reason it took so long for him to realise his potential was his off-field habits.
"I think he would admit that perhaps his lifestyle let him down a little bit and he liked a pint and a pie," Pardew said.
"I had a couple of long chats with him about it. I remember saying: 'I've just paid one million pounds for you. I've put my neck on the line a little bit here at this level, you better get that in order.'
"But we had a good sports science team at Southampton and that helped him. I'm not sure he was getting the right guidance before and maybe there were people who were a bit loose round him. He certainly looks a meaner, finer-looking specimen now as a player than he did even when he was with me."
Newcastle sit in seventh spot, one place and three points ahead of Southampton, who after a strong start to the season have picked up one point from their past four outings.
Pardew is hoping his side keep Lambert quiet on Saturday, but would back his former player to secure a spot in the England squad for the 2014 World Cup in Brazil.
"Back then I never thought he'd play for England but I did tell him he could get to the Premier League. I'd managed there with West Ham. I'd coached Carlos Tevez and Dean Ashton and I thought he could definitely have played in my West Ham team," he said.
"If Rickie plays in Brazil, I'll certainly be having a glass of beer and toasting him. If he scores, I'll be jumping around the room."