The popular former Blues hitman made a club record £1m switch from Fratton Park to the San Siro back in 1984 and watched with excitement as the Italian giants were handed a trip to Pompey in Tuesday's draw.
But despite the stature of the Serie A club and Milan's wealth of talent, Hateley believes Pompey now have the players who can compete with the cream of Europe.
>>> Also see: New legends are born in Praca de Santiago... Click here to read Allen's InsightHateley said: 'There is no reason at all why Pompey cannot beat AC Milan.
'Of course the fans will be excited by this draw, but it's not little old Pompey any more – they've got four players in the England squad and they've got internationals all over the pitch.
'On their day, they can give any team a game.
'They've shown that over the past two seasons – especially last season when they won the FA Cup.
'Some people might be surprised to see AC Milan at Portsmouth, but I'm not.
'Knowing Harry and the way he puts teams together, the man's a genius at building teams.
'This Portsmouth team is going from strength to strength – it's just a shame this game isn't in the Champions League!'
Hateley became a big terrace favourite at Pompey despite spending just one season at Fratton Park in the 1983-84 campaign.
The striker netted 25 goals in 44 games and forged a formidable partnership with Alan Biley in Pompey's first term back in the old second division.
But after making an impact for England under-21s, Hateley was promoted to the full squad for the trip to South America – scoring on his debut against Brazil – and Milan came calling soon afterwards with a huge transfer fee that then chairman John Deacon was quick to accept.
Hateley said: 'I had one fantastic season down there – I absolutely loved it.
'I still have a lot of affection for the place – my daughter was born there and it was great playing up front alongside Alan Biley and in such an attacking team with Kevin Dillon, Neil Webb and the rest.'
Hateley is also predicting a special atmosphere on November 27 when Ronaldinho, Kaka, Paolo Maldini and Co come to town.
He said: 'It always used to be a good atmosphere when we were playing in the second division, so goodness knows what it will be like when they play Milan.
'Fratton Park holds 20,000, but Pompey fans always make it sound like 50,000.
'I'm sure it will be rocking.'
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The full article contains 480 words and appears in The News newspaper.