Hamilton, who won a record-equalling seventh F1 world championship last Sunday, is set to receive the accolade in the New Year Honours.
And Murray, who was given the honour himself back in 2017 following his second Wimbledon win and second Olympic gold medal, says Hamilton has more than earned it both on and off the track.
"I'm not necessarily all for sportspeople being given knighthoods for what we do," the three-time Grand Slam winner Murray told Good Morning Britain.
"But in terms of what he has achieved as an athlete, of course he deserves it.
"As a sportsperson he's one of the most successful sportspeople in the history of the country. He's an amazing driver.
"He supports some great causes as well away from the racing track, so yes I would say he definitely deserves it in terms of his success."
When asked about the possibility last week, Hamilton said: "When I think about being knighted, I think of people like my grandad who served in the war. And Captain Tom, who waited 100 years.
"Then you have these doctors and nurses who are saving lives at this hardest time ever. I don’t look at myself as an unsung hero. I haven’t saved anybody."
Hamilton will follow F1 legends Sir Jack Brabham, Sir Stirling Moss and Sir Jackie Stewart in being awarded the honour.
Additional reporting by PA