The 47-year-old resigned as Wales boss on Friday and took training with the Black Cats on Sunday morning.
Official confirmation of Coleman's appointment is believed to be imminent, and Reid believes that the Welshman is a good choice even though he will have a tough job on his hands.
"I think Chris Coleman will be a good choice," Reid told Sky Sports News. "He has got a hard job on and the fans are desperate for any sort of result.
"It is a massive football club and when times are going bad, is it a good time to go in? Hopefully, they can only go one way and that is up. Or I am hoping that.
"But it is certainly going to be difficult because the Championship, as we all know, is a tough, tough league."
Sunderland were relegated from the Premier League last season and currently sit bottom of the second tier.