Simons, 21, will enter Euro 2024 off the back of an impressive 2023-24 campaign, scoring 10 goals and registering 15 assists on loan at RB Leipzig from Paris Saint-Germain.
The forward is being tipped to enjoy a strong European Championship, and Koeman has talked-up the Dutchman's potential, but the head coach has also insisted that the playmaker must be given "time".
"He is a big talent who makes conscious choices about where he will play. He made a deliberate choice to go from Paris to PSV [Eindhoven], then moving on to Leipzig in the Bundesliga to go up a level," Koeman told UEFA's official website, as the national side prepare for the European Championship.
"He is developing incredibly well. Sometimes we want too much, too soon of these young players. You have to give them time, including within the Dutch national team.
Simons could star for Netherlands at Euro 2024
"It is different from playing at your club. But those are the types of players who will become big stars as they have so much quality and because they have played at the highest level from a young age. He has played against Real Madrid in the Champions League. It is wonderful that he has all these experiences already."
Simons has one goal in 14 appearances for his country, with his first effort for the national side coming in their 4-0 victory over Iceland on Monday night.
Netherlands have now concluded their preparations for Euro 2024, and their tournament opener will come against Poland on June 16, before facing France and Austria in quick succession.
Holland are being tipped as potential dark horses this summer, with the team looking to repeat their success from 1988, when they were crowned European champions.
Netherlands are chasing a second European Championship title
"In principle we still have a strong squad now. I think that we have been a little unlucky with quite a few injuries during the past year and also for sure a lot of injuries to players who were more than valuable for the national team," Koeman added ahead of the tournament.
"The players are five years older than in my first period and we are seeing younger players coming through again. Xavi Simons, Tijjani Reijnders, Lutsharel Geertruida, Quilindschy Hartman, Mats Wieffer, Jerdy Schouten, Joey Veerman, you name it.
"Many of these guys play in the Netherlands and have developed into national team players. The current group is a very good one. I think many countries are envious of the number of central defenders we have in our squad.
"They all play for big clubs. We feel we still have a lot of quality in this squad. If we can make that work and create an atmosphere with a lot of fan support then the Netherlands could have an amazing tournament."
Netherlands famously failed to qualify for Euro 2016, but they reached the last-16 stage of Euro 2020, suffering a 2-0 defeat to Czech Republic in the first knockout round.