As co-hosts they did not have to qualify for 2002 but impressed in last year's Confederations Cup, when they reached the final before going down to mighty France.
"Japan are learning all the time," Pele told World Soccer magazine.
"Their coach, Philippe Troussier, has World Cup finals experience with South Africa, and an excellent playmaker in Hidetoshi Nakata."
But Pele warned Japanese fans not to expect miracles from their side when they begin their campaign against Belgium in Saitama on 4 June.
"The Japanese must not think too far ahead and concentrate on reaching the second round," he said.
"After all, even that, for Japan, would be football history."