Sundowns signed Coetzee in August 2017 from Ajax Cape Town soon after he failed a medical at Scottish giants Glasgow Celtic with a foot problem.
However, he only made his Downs debut in a CAF Champions League clash with Leones Vegetarianos in Equatorial Guinea last week Wednesday due to persistent injury issues.
The former Bafana regular played again and impressed in the club's 2-1 Tshwane derby win over SuperSport United at Lucas Moripe Stadium on Sunday.
"It's good to have him back. It's unbelievable that this boy has not been playing football. He is Bafana material," Mosimane said in the post-match press conference.
"He puts himself in the pool now. I think he can compete with Buhle [Mkhwanazi] in centre-back. He can also compete with 'Tyson' [Thulani Hlatshwayo] to be honest.
"As much as these guys are good as centre-backs, but Mosa [Lebusa] and Rivaldo are giving the option to [Bafana coach] Stuart [Baxter] to say the pool is bigger now."
The ex-national team coach believes Coetzee can still land an overseas move.
"It's sad to see this boy not playing football. He deserves to play in Europe to be honest. You can see how he passes the ball between the lines. He finds [Lebohang] Maboe and Themba Zwane as easy as Ricardo Nascimento. He can pass the ball.
"It's a pleasure to see him playing like that because we invested a lot of money on this quality. In my opinion he can play here for the next two years. He needs to move [to Europe], but he needs to play for Bafana Bafana."