Ajax have emerged as a serious contender in Europe's premier club competition after sensationally eliminating three-time reigning champions Real Madrid in the round of 16.
Led by Dusan Tadic, Matthijs de Ligt and Frenkie de Jong, Ajax sent shockwaves through the Champions League after blitzing Madrid 4-1 at the Santiago Bernabeu to seal an unforgettable 5-3 aggregate triumph in March.
Not since 1994-95 and the golden generation of Edwin van der Sar, Clarence Seedorf and Patrick Kluivert have Ajax reigned supreme in Europe but Olsen – who won two Eredivisie titles and the KNVB Cup during his three years in Amsterdam in the 1980s – thinks Erik ten Hag's fearless side can follow in their footsteps.
Asked if Ajax can win the Champions League this season, Olsen told Omnisport: "Why not? That's why you're there.
"[There are] a lot of different things at this level, you only have two games, some other things come into it in, maybe a bit of luck.
"I think they're capable of it [winning the tournament], of course. Their youth, they're not afraid of anything but that can also work against you."
Olsen, who later moved to Manchester United, added: "Having played for Ajax many years ago, it's fantastic to watch what they're doing.
"The youth is a different kind of temperament. They're not afraid and have a go. The last results against Real Madrid were fantastic.
"Especially for a smaller country to deliver that kind of performance at this level was brilliant."
Standing in the way of Ajax and the semi-finals are Italian champions Juventus, who will make the trip to Amsterdam for Wednesday's first leg.
Juve – led by Cristiano Ronaldo's hat-trick – completed a memorable comeback to upstage Atletico Madrid in the last 16 as they eye their first Champions League title since the 1995-96 season.
"If you look at who [Ajax] have already played against and the results, I don't think they have to be afraid of anybody at this stage," added Olsen, referring to Ajax's two draws against German giants Bayern Munich during the group phase.
"I like the way they play. They stand for the football we like to watch - attacking and aggressive, and also tactically clear in what they do. I'm looking forward to it because the Italians are always organised and well set-up defensively. It will be very interesting to see."