Lyon was sacked by Fremantle earlier in the week after missing finals for a fourth-straight season, with the Dockers currently sitting 13th on the ladder.
Meanwhile, Goodwin remains safe in the top job at Melbourne despite his side finishing 17th this year from just five wins, with the club instead electing to overhaul their assistants.
It comes a year after the Demons played in a preliminary final.
King believes Lyon is the better leader of the two to drive standards and deliver a sound game plan.
“If your life depended on results next year, and you said you can have one of these two guys coaching next year, I’m taking Ross Lyon because I’ve seen it,” King told SEN’s Crunch Time.
“I’ve seen him correct a club, bring standards, raise the bar with standards, attach players to become the driving force, empower them for every decision and deliver a game plan that, while some don’t like it, it wins home and away games.
“He hasn’t won the ultimate, but he does ring the rag dry on the players and maybe that has a lifespan, but in a one-off block, you’d say Ross.”
Former Hawthorn legend Dermott Brereton echoed King’s sentiments.
“I agree. What makes it interesting is Melbourne is looking at their football department and saying something is wrong,” Brereton said.
“I think they’re looking at their list of coaches and want a change – not necessarily their senior coach.”
King said Lyon was a “certainty” to return to senior coaching at some point.
“I reckon it’s a certainty (that Lyon coaches again),” he said.