The 2009 captain has been plagued by injuries over the last year but made his latest comeback last week following back surgery in January.
O'Connell was originally expected to be ruled out until April, but having come through the Munster A clash unscathed he has been selected to face Connacht in the PRO12.
And Gatland insists the inspirational leader is still in the running to win a place on the plane Down Under.
"The older players with a bit more experience have the upper hand because they have that behind them, don't they?" Gatland told the Irish Examiner.
"We know a lot about Paul O'Connell. We know what he brings to the party so we will be keeping a pretty close eye on him."
The Lions boss has also left the door open for crocked stars such as Ireland's Tommy Bowe and Simon Zebo and Wales' Dan Lydiate to stake a claim.
"Someone like Tommy Bowe, if he gets back from injury, Dan Lydiate as well. There is a young, talented player in Simon Zebo - is he going to run out of time? We'll keep a close eye on these sort of players over the next six weeks," added Gatland.
"We looked at the Six Nations in terms of form but we have got to be aware - and I've been involved in the Six Nations for a number of years - to know it's a tournament of confidence. Win a couple and you can go on and win it. You lose a couple and you can have a poor Six Nations.
"We've seen how decimated the Irish team have been with injuries. You've got to take into account everything. For sure, some of those players are disappointed with the way they finished but you have got to keep everyone in mind and not rule them out."