Albion spent a reported £8 million to bring Chester to the Hawthorns from Hull City last summer but the centre-back made just three Premier League appearances in the first six months of his debut campaign in Birmingham.
However, the 27-year-old's exile has been ended by Tony Pulis in recent weeks, with the former Manchester United man finally winning and holding down a regular place at club level.
Coleman had been picking Chester for Wales duty even when he was out of favour at the Baggies, but he admitted that he is relieved to see the defender playing regularly ahead of this summer's tournament as it has made his decision easier.
The Wales boss explained, as quoted by the Daily Star: "[Chester] would have been in the squad even if he had not been playing. But if he was worried about being in our starting XI that would be warranted because, even though he has been magnificent for us, he would have been missing some sharpness.
"Thankfully James has had a run of games now which is a relief because if you are not playing, no matter how much training you do, you will be a bit short. So it is good for him. He has been playing for West Brom and that is important.
"Starting in a tournament is different to making the squad. We have real competition given guys like James Collins have been having great seasons for their clubs. But James is always going to be in the squad if he is fit, and playing for his club in this period has been important for him."
Chester made his international debut for the country of his mother's birth in a friendly against the Netherlands in June 2014, and has since gone on to win 10 caps.
He played the full 90 minutes in both of Wales' friendlies in the recent international break last month, and looks likely to be a regular starter for the side at the European Championship in France as the country contend their first major tournament in 58 years.