Kerber upset Serena Williams on Rod Laver Arena to claim her first grand slam success 12 months ago, before also winning the US Open to finish the calendar year at the top of the WTA rankings.
The German has made swift exits from tournaments in Brisbane and Sydney as she struggles going into the defence of her crown at Melbourne Park.
The winner of successive Australian Open titles in 2012 and 2013, Azarenka - who lost to Kerber in the quarter-finals last year - knows what it takes retain one of the biggest prizes in tennis.
The Belarusian claimed Kerber, who has been drawn against Ukrainian Lesia Tsurenko in the first round, must not shy away from the expectation that will accompany her status as the holder.
"I don't think many people expected last year's result from Angelique but she's done amazing and I think there is no ideal preparation," Azarenka said. "For myself, as a player, I always thought there's no ideal preparation, it's day-to-day preparation within the tournament. It's a long two weeks, you can have good days and bad days.
"Of course, the more confident you are sometimes the better chance you have of feeling better and going through the matches.
"But the players know the first rounds are always dangerous and then you pick it up within the tournament.
"I think she will be fine. Last year also she almost lost in the first round.
"I don't how ready she is mentally because being a defending champion… is more of a factor than how she is playing right now.
"If she is embracing [the] challenge of being a defending champion, I think she'll be fine."
Azarenka, who is taking a break from the sport after the birth of her first child, struggled to nominate a clear favourite ahead of the tournament.
"I honestly don't know, especially with the last year, the game has been unpredictable," she said. "We've seen high competition, players at a high level but never really reached that next step. Players coming in like [Karolina] Pliskova, Kerber and I think it's going to be interesting [to see] who can maintain last year's higher step and see what happens … maybe some newcomers can make a surprise."