Four-time Broncos premiership winner Lockyer said Walters deserved the extension until the end of 2025 after turning the club around from the wooden-spoon season of 2020.
Walters has overseen an unbeaten start to 2023 through five rounds, the best start since 1998, when he was a premiership player himself.
Walters, who won five premierships as a Broncos player, took the side to ninth in 2022.
He has also overseen the rapid development of young players such as Selwyn Cobbo, Ezra Mam, Pat Carrigan and Payne Haas.
The 53-year-old has also improved the vibe at Broncos HQ, which is a far more upbeat and happy place than it was three years ago.Â
"I think he has done a wonderful job of stabilising the place," Lockyer told AAP.
"He has got the history and the DNA of the club embedded in him, and I think he has told the players that story and given them a real sense of purpose in playing for the Broncos.
"Bringing a team together is important and something we talk about a lot, but I think it is also underrated in terms of performance.
"I think stability is key for us at the moment, and he has done a wonderful job there."
Lockyer started his Broncos career in a team magnificently led by Allan Langer and Walters.
He was captain when Walters was assistant coach in the mid-2000s, and was on the board when he was initially appointed coach at the end of 2020.
"What I know about Kevin is that with him as coach the players will play with passion, play for the jersey and play for each other, and sometimes that is 80 per cent of the battle," Lockyer said.
The Broncos have lost Herbie Farnworth and prop Thomas Flegler to the Dolphins in 2024, but fullback Reece Walsh, five-eighth Ezra Mam, skipper Adam Reynolds, prop Pat Carrigan and winger Selwyn Cobbo are wrapped up long-term.
The Broncos on Thursday signed 19-year-old centre Deine Mariner until the end of 2027, which Lockyer said was their "back-up plan" for Farnworth.
"The really critical ones that we wanted to keep where we didn't have back-ups for we have been able to keep, which is a good sign," Lockyer said.
"Some of the key players we need to be successful are staying.
"Kevvie has done a wonderful job. CEO Dave (Donaghy) has done a great job as well and (recruitment chief) Simon Scanlan.
"Not disrespecting the previous guys, but the mandate was stability ... we had to stabilise the club. Those guys have been integral in getting that done."
Lockyer said the happiness at Red Hill was there for all to see,.
"(Walters) has done a really good job to create that enjoyment factor for the players," he said.
"Winning helps, but they want to play with each other."
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