Nolan joined Bolton as a trainee in 1999 and scored 50 goals for the club.
Megson indicated that the Liverpool-born midfielder had lost his form prior to his move to St James' Park earlier in the year.
Negative talk could sink Bolton - Megson
""I like the lad - I have a lot of time for Kevin," he added.
"I believe he took his foot off the gas for a few years, but I think he can get back to the standard he once showed at Bolton."
Nolan scored his first league goal for Newcastle in the 2-0 win at Crystal Palace last Saturday and also scored in Wednesday's win against Huddersfield in the Carling Cup.
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