The attacker, who has yet to break into the Napoli first team, spent last season on loan at eventual Serie B winners Pescara, and has impressed the national team's coaching staff with his ability.
Prandelli, who led Italy to the final of Euro 2012, praised the qualities of the Partenopei youngster, tipping him to become a fixture in the Azzurri set-up before long.
“We have been closely following Insigne and the reports are all excellent. He is a prototypical modern attacker, gifted tactically, and he plays according to the team, not to himself,” said the 55-year-old to Corriere dello Sport.
Prandelli also refused to shut the door to the national team on Antonio Cassano, revealing that the new Inter striker and all other players would be under consideration, as long as they were playing first-team football for their respective clubs.
“Two years ago, he [Cassano] was great in qualifying for the Euros, even when he could only play an hour," he added. "But now I have to think about the World Cup qualifiers, and it all depends on him.
“If Cassano plays continuously, he is relatively young and can still compete. I’m not cold towards him, but sincere and loyal with my players. And this applies to everyone else.”
Prandelli also commended the decision of Roma captain Daniele De Rossi to reject the advances of Manchester City, saying: “It is better for him to have remained in Rome.
"The nation needs him to raise the level of the league and become a reference for young people. I say this from my heart.”