Diaz has enjoyed a standout 2025/26 campaign with Bayern Munich, forming part of a prolific attacking unit alongside Harry Kane and Michael Olise as the club enjoyed a record-breaking season in front of goal and secured a domestic double.
His performances have elevated his profile among the world's elite, with strong contributions in both domestic and international football, including goals on the World Cup stage and a key role in Colombia's qualification campaign.
Valencia, who scored 13 goals in 34 appearances during his own spell at Bayern in the 1993/94 season, believes Diaz's numbers and influence put him firmly in the conversation for football's most prestigious individual award.
"Lucho can and should be among the top candidates for the Ballon d'Or. His stats prove that he is currently one of the best players in the world," Valencia told Sport Bild. "If Colombia go far in the World Cup and Lucho continues to perform at his current level, he can be one of the favourites."
He added that Colombia's supporting cast, including James Rodriguez, could be crucial if the national team are to mount a serious tournament run that boosts Diaz's award credentials.
Valencia also pointed to Diaz's environment at Bayern as a key factor behind his surge in form following his move from Liverpool in 2025. He suggested the winger has thrived due to the sense of belonging he now feels at the Allianz Arena.
"Lucho is performing particularly well at Bayern because his teammates, the club's management and the fans are giving him the love he felt was lacking towards the end of his time at Liverpool," he said.
"When he feels comfortable and appreciated, he's even more motivated to repay the club on the pitch."
The former striker also highlighted the influence of Bayern's attacking quality and coaching setup, praising the contributions of Kane, Olise, and the tactical work of head coach Vincent Kompany.
Diaz, who has already opened his World Cup account and scored consistently in qualifying, now has an opportunity to further strengthen his reputation on the global stage as Colombia continue their tournament campaign and Bayern maintain their European dominance.
