Walsh did the majority of Monday's opposed session against France at the NSWRL Centre of Excellence at fullback, with Wallabies coach Les Kiss a keen observer.
Walsh - the star of Australia's Ashes whitewash last year - has not played since August due to an ankle injury picked up while playing for NRL side Brisbane.
But the Broncos superstar appears to have his nose in front of Clive Churchill Medal winner Tedesco for the No.1 spot for Thursday's tournament opener with the Kiwis at Allianz Stadium in Sydney.
"I think we've seen over a long period of time now what kind of player he (Walsh) is," Yeo said on Monday.
"I thought he was outstanding in the Ashes last year and had the hiccup with his ankle there at the back end of the year probably limited his game time.
"He is a tremendous player and you can see that he gives that little bit of confidence to everyone else because he can just make something happen from nothing.
"He did a fair bit of training at the back … I'm not quite sure how the team looks just yet, but I think we're very lucky in that department."
Yeo was quick to caution that Tedesco was undergoing a lighter load as a result of his premiership-winning exploits with the Sydney Roosters.
In 2022 Australia opted to rest their NRL grand final players for their World Cup opener against Fiji.
"By the finals, semi-final you want to know the team," Yeo said, with Walters set to name his squad on Tuesday afternoon.
But with the Kiwis first-up, Australia will be afforded no such luxury.
New Zealand have not beaten the Kangaroos on Australian soil since 2014, but with a pack that contains James Fisher-Harris, Joseph Tapine and Naufahu Whyte, there's every chance they could outmuscle Yeo's side.
"(We want) to reignite that rivalry. It's a really important part of rugby league and trying to grow that international space," Yeo said.
"They're all great players in great form, so we understand the job at hand and what we're going to have to bring to the game.
"It's going to be a really difficult battle, particularly in the middle I'm assuming.
"We're excited by it, and that's exactly what you want in the international environment."
Yeo spent a good 10 minutes chewing the fat with Kiss at the conclusion of the Kangaroos' training session, before swapping jerseys with Wallabies fullback Tom Wright.
The Australian lock revealed his father Justin had been coached by Kiss at the North Sydney Bears, but was doubtful of his chances of getting a ticket for the Bledisloe Cup clash at Accor Stadium on Saturday.
"I might be on father duty, I don't know if I'd get that across the line with the missus," Yeo said.
