The Whites splashed the cash to sign the Wales international from Manchester United just before the transfer window slammed shut in the summer, paying an initial £25m to take him to Elland Road.
He has struggled to make a big impact so far, but put Leeds ahead in north London on Sunday evening when he struck just before half time.
Kilgallon believes that the goal will boost James, as will the positive feedback he is sure to see about his performance.
And if James can kick on and hit his best, Kilgallon feels the winger will be like a new signing despite having now made eight appearances for the Whites in the Premier League.
“Dan James got out quite a few times on the right and looked a threat”, Kilgallon said after the Spurs loss on BBC Radio Leeds.
“It will be good for his confidence now, obviously seeing the comments about playing well, that will kick him on and hopefully now we get that player we saw when he was playing for Wales and glimpses at Manchester United.
“He’s almost like a new signing and again, he is coming good and I am sure he will.”
Leeds will hope James can step up over the coming weeks as they try to climb away from the relegation zone and into the relative comfort of mid-table.