The 19-year-old Belgium international has been impressive for the Baggies in his 10 appearances so far, scoring three times, and the Hawthorns boss believes regular football has put the youngster "in a good place" compared to last season.
"I know Romelu is in a good place and he's happy," Clarke told reporters. "I know he's in a much better place now than he was when he came here at the start of the season because he's had minutes in the Premier League.
"He's played matches, he's been a handful and he's shown everybody that he's a big talent and one for the future, so I know he's happy."
Lukaku missed two gilt-edged chances against Newcastle last week before eventually heading home in the second half, but Clarke is happy with the Belgian creating goalscoring chances.
"He has done well, he's got his goals," the Scot added. "We can talk about the two chances he missed last week but he made good runs to get into those positions.
"If he got into those positions again, he would score. He's a goalscorer. He didn't hide when he could have hidden.
|BOING BOING LUKAKU|
|5/1||Romelu Lukaku is 5/1 to open the scoring against Southampton tonight|
"You just have to accept that as part of the game. He's young, he's raw, he's got to develop and he's got to learn how to deal with those one-on-ones, how to handle them and how to find a way past the goalkeeper but he will do that for sure.
"He works well on the training ground and he wants to be better, which is fantastic. There is no reason why his head should drop."