Annan met this week with Iranian leaders in Tehran as part of a delegation from The Elders, a peace advocacy group founded by former South African President Nelson Mandela and Archbishop Desmond Tutu.
"We are very encouraged by the frankness of our conversations with our hosts," the former secretary-general said. "We are convinced that Iran can be a key factor for stability and opportunity in the region, thanks to its historical role and capacity to influence others."
Iranian President Hassan Rouhani, who took office last year, vowed to lead Iran as a moderate. Since his inauguration, Iran reached interim agreements with members of the international community to curb its nuclear research activity.
Annan said Iran's influence in the region could ease regional tensions related to the spread of extremist ideologies as well as issues associated with the Syrian crisis.
"We believe Iran should be part of the solution to the Syrian crisis," he said in a statement Thursday.
Iran is a strong supporter of Syrian President Bashar Assad.
U.N. Secretary-General Ban Ki-moon rescinded an invitation to Iran to attend the Geneva II conference last week in Montreaux, Switzerland, after Washington and members of the Syrian opposition expressed frustration over Iran's allegiance to the Syrian president.