"He is performing well because he feels well. This is the right club to make him happy, to make him play like he loves to play and score goals."
Campbell was signed for Leicester by Martin Allen in 2007 but his Foxes career has never got off the ground.
He fell out of favour under Nigel Pearson and went on loan to Derby and then Blackpool where he flourished under former Foxes boss Ian Holloway.
Campbell seemed certain to leave the club this summer - until Pearson left to take over at Hull.
And Sousa, who has vowed to lead Leicester to the Premier League within two seasons, says the forward has impressed him in pre-season and is finally settled.
"He's someone who has never got the recognition with Leicester he would like to have," Sousa said.
When the player is relaxed, happy and feels committed he can give the maximum and I think DJ is in this moment
Paulo Sousa on DJ Campbell
"During his two years he has never felt so good at Leicester but he is playing and training with a lot of happiness and expressing himself.
"When the player is relaxed, happy and feels committed he can give the maximum and I think DJ is in this moment."
The Foxes lost in the play-off semi-finals against Cardiff City last season but Sousa has no doubt they have the quality to go up this time around.
"It is very present in my mind to have a winning mentality. I need to have confidence, only winning we can have recognition," he said.
"I am very excited with a lot of confidence. I am very positive in everything that we have done. What I have seen in four weeks is always the team and players progressing."
Foxes full-back Bruno Berner says the team is adjusting to life under the new manager.
The Swiss defender told BBC Radio Leicester: "He has new ideas, and a new philosophy. He's used to having success, especially as a player.
"He's a champion, he has a very good eye on the details on the pitch. He's very emotional as well but is very with us. If he sees something he has to correct he tells you straight away and I like that.
"We are going to play more out from the back than we are used to so that will take time. It has a lot to do with confidence, we need confidence to have the ball."
And Sousa's confidence already seems to be rubbing off on the squad.
"We are going for [promotion] this year - not a couple of years - we want to be top six straight away," Berner said.
Leicester City manager Paulo Sousa will be BBC Radio Leicester's studio guest on The Football Forum on Monday, 9 August at 1800 BST. Tune in to 104.9fm to put questions to the Foxes boss.
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