Coleman previously managed Fulham, Coventry and Real Sociedad.
And Ratcliffe believes that Coleman is a sensible selection to provide continuity following the loss of Speed.
"I think we need a Welshman in charge and I do not think there were too many other candidates around who could come in," Ratcliffe told BBC Sport.
"From what you hear it was a close call between Gary and Chris last time the FAW chose the manager so I think this does provide some sort of continuity as far as they are concerned.
"And from a financial point of view it makes sense as they don't have to pay compensation.
Chris goes in there with a good track record and he's got a good reputation in the game
"Chris is a good man and a proud Welshman, so he will be passionate about the job and want to carry on the good work started by Gary."
Coleman won 32 caps for Wales and was a colleague of Speed at international level.
"Chris goes in there with a good track record and he's got a good reputation in the game. He did very well for a long spell at Fulham. I know things didn't work out for him at Coventry City but financially things were tough and no-one else has been able to do too well there."
Ratcliffe, who won 59 caps for Wales, added: "Obviously there have been a lot of emotions after what happened with Gary but I think Chris is a good choice and deserves support. He has some very good, maturing young players to work with as well."
Former Wales captain Kevin Ratcliffe has backed the choice of Chris Coleman as successor to Gary Speed as national team manager.