The 25-year-old re-joined the club last week after leaving Kidderminster Harriers at the end of his contract.
Rowe-Turner spent two seasons with the Gulls, having joined the club 2010 after leaving Leicester City.
"He's a rough diamond still and he's got a huge amount of potential and I back him to do extremely well," Nicholson told BBC Sport.
"Physically he's got all the attributes and he's at a stage in his career where he knows he's got to really put the work in, because he could still have a really good career ahead of him.
"When he first came in when I was here as a player I thought I could be struggling.
"I managed to fend him off but I think he's a different player now and a different character and I'm looking forward to working with him again."
Rowe-Turner replaces Dan Butler, who turned down a new contract at Torquay to join League Two side Newport County.
"We offered Dan a very good contract and the chance to progress his career here," Nicholson said.
"We thought he should have another year in our system before he tried to take a bigger step up than just one division, but the opportunity came up and he felt he had to do it.
"We wish him well, he's a great lad, I loved working with him, as did everybody here, and his attitude and performances were a big part of what we achieved last season."
Torquay United manager Kevin Nicholson says new left-back Lathaniel Rowe-Turner will be a success at Plainmoor.