The champions of Gibraltar host the first leg against Celtic on Tuesday after beating Flora Tallin of Estonia.
"I think they can give Celtic a few problems," said Ayrshire-born Wilson, now manager at Lions, told BBC Scotland.
"But, as the game goes on, you would expect Celtic to take control."
Lincoln Red Imps are the dominant side in Gibraltar with 14 consecutive championship wins.
And many of their semi-professional squad have international experience.
"Eight or nine of the players will have played in a European Championship qualifying campaign with Germany, Poland, Ireland and Scotland, so they won't be phased by a big crowd in Glasgow," added Wilson.
This will be Lincoln Red Imps third European campaign and they will look to leading goalscorer Lee Casciaro.
The 34-year-old scored Gibraltar's first competitive goal at Hampden in March 2015, with Wilson in temporary charge of the national side.
That goal drew the visitors level before Scotland went on to win 6-1, while the return match in the group ended in a 6-0 success for Gordon Strachan's side.
"Lincoln Red Imps will work to Lee's strengths," said Wilson, a former Kilmarnock trainee.
"He has pace and power. He's a real one-touch striker. He'll take a touch and then hit it from anywhere. That's where the goal against Scotland came from."
Lincoln Red Imps can make life difficult for Celtic in Champions League qualifying, according to former Gibraltar assistant boss David Wilson.