Edinburgh have not recorded a top-four finish since the conclusion of the 2008/09 season, but Paterson, Scotland's record cap holder and points scorer, is tipping his old club for big things.
"They have to target the top end of the table," Paterson told BBC Scotland.
"With a defence like that they are hard to beat. They're in the top four at the moment, and similarly to Glasgow it's a crucial period of the season.
"They'll want to go into the 6 Nations still in that top four."
Edinburgh turn their attentions away from domestic action this weekend and towards the European Rugby Challenge Cup where they take on Agen.
The Scottish side currently sit third in Pool 5, level on points with London Irish.
And Paterson is backing Edinburgh, runners-up in last year's competition, to beat Agen this weekend and set up a potential final-day qualification shootout with Pool leaders Grenoble.
"Edinburgh did so well in the European Challenge Cup last year, they're in a good position this year as well," he added.
"This weekend's game against Agen is crucial. If they can win at home then it sets up a big final fixture against Grenoble.
"They'll want to finish off the two games in Europe with victories. Keeping that momentum going that Edinburgh have found will be really important and it should set them up for a big season finale."
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