The 33-year-old striker finished top scorer for Notts last term with 14 goals and won the player of the season award, having only signed for the club in summer 2015.
Sheridan believes that Stead, who was linked with a switch to Scotland but appears set to remain at Meadow Lane, can be an influential figure in 2016-17.
"Jon has played at a high level and has goals in him," Sheridan is quoted as saying by the Nottingham Post.
"He will be a very important player for me. He has the cuteness and the cleverness and I see him in the same light as Jack Lester, who I had at Chesterfield.
"He never played away from home, but he was my best player and my captain. He scored 18 goals that season.
"Jon is different to Jonathan Forte, he's different to Izale McLeod and he's different to little Adam Campbell. I have to use Jon in the right way, but I expect him to be a big player for me."
How crucial will Jon Stead be to Notts County's season? Share your thoughts on Pride of Nottingham by signing up to the website, visiting the forum and joining the conversation.