"I think that she has good prospects if she decided to challenge," Peter Garrett, Australia's environment minister, told Al Jazeera.
"It will be up to the caucus of the Labor Party to make their decision by way of a vote. I won't second guess what the caucus will decide."
Rudd has blamed factional power brokers within his party for plotting against him and has vowed to fight the challenge.
"I was elected to do a job," Rudd said. "I intend to continue doing that job."
Rudd was elected with a landslide victory in December 2007, but his popularity has waned in recent months, mostly over domestic issues.
He flip-flopped on a plan to introduce a carbon-trading scheme to address global warming and has faced opposition from the powerful mining industry after he introduced a plan to tax their profits.