The Ospreys winger scored six tries in last year's Six Nations as Wales recorded their second Grand Slam in four years.
However, despite his recent success with his country, Gatland feels Williams can play an even bigger part in the Six Nations this time around.
"We're all challenging each other to get better and Shane will become more of a creator than just a finisher for us," said Gatland, who takes his Wales side to Edinburgh to face Scotland this Sunday.
"He's such a great runner and he showed that for his opening try against Australia in the Autumn series.
"He appeared in the centre of the field and produced that step and off-load for Lee Byrne to make the break through."
Gatland will be hoping Williams can produce even more moments of inspiration as Wales look to live up to their tag of pre-tournament favourites.
The former Ireland and London Wasps coach admits Williams wasn't quite at his best during the November internationals but that he will be back on top form as Wales go in search of another Six Nations title.
"Shane's a fantastic player and absolutely vital for us," added Gatland.
"He had a huge 2008 by winning the Six Nations, breaking the all-time Welsh try-scoring record and becoming the world's best player - all in his testimonial year.
"We were conscious of that and gave him all the support he needs. He's an experienced player and at times we've given him some leeway with training because we need to make sure his performances on the field are right.
"He didn't play as well as he can in a couple of the autumn matches. Most teams are marking him extremely closely and are now putting two men on him to try and stop him.
"I believe he was aware of the standards he had set and other teams were targeting him - he was trying too hard and needs to find a balance."