Hamilton reeled off a list of his biggest competitors for next year but failed to name-check Ricciardo.
But Horner thinks his man will be in the running and told Hamilton to keep an eye on the Aussie.
“Lewis would be very foolish to underestimate Daniel,” Horner told Sky Sports News.
“He’s a phenomenal driver, he’s arguably the best overtaker in the business. He’s driven some great races this year and some great races in his time at Red Bull.
“He’s absolutely ready for a championship challenge if we can provide him with the tools to do the job.”
Hamilton had claimed his biggest rivals were Fernando Alonso, Sebastian Vettel and youngster Max Verstappen.
“Fernando is the toughest there is, you need the utmost respect for him and really have to play your cards right,” Hamilton told Motorsport magazine.
“You can race physically closer with him it would seem. His racecraft is mighty. Max’s racecraft is very impressive – he’s doing wonderful things and is going to grow so much.
“The four strongest drivers I think are me, Fernando, Sebastian, Max. I really hope we are all in the fight next year.
“You look at them all slightly differently, they all have different characteristics. Sebastian from this year, I could say I need to give him more space. Not in a negative way.
“Max takes a lot of risks – also you have to give him more space. It won’t be a problem – it’ll just be freaking tough. What a contest. Even I’d pay to see that!”