Germany, Poland, Georgia and Gibraltar make up Group D with two, and potentially three, teams making it through to the finals in France in two years' time.
Both teams are managed by former Celtic managers - Gordon Strachan and Martin O'Neill - and Lennon is convinced the first game between the sides on November 14 would benefit from being staged at Parkhead with Hampden out of commission after hosting the Commonwealth Games.
"For me the atmosphere would be better as it's a fantastic arena where the fans are closer to the pitch. That always adds to the electricity in the stadium, said the Hoops boss who was coached by both men during his time as a player.
"On the draw, I think they could both have done without it but it just sets up a fascinating two games in what is a very exciting group.
"Germany, Poland and the new boys Gibraltar make this exciting but I think both teams will feel they have a fighting chance of qualifying.
"What Gordon and Martin will be stressing is that the focus should not be on either of them. It should be on the teams, but knowing the two of them, they are very canny and will know how to approach the game the right way.
"It will be a very intriguing match-up between two superb managers and I don't think there's much between the squads either."
And Rangers manager Ally McCoist agrees with his cross-city rival over Scotland's chances of progressing to the finals.
McCoist, who scored 19 goals in 61 appearances for his country, said: "Overall it's a good draw for us.
"I think the Germans are a fantastic draw, but whoever you got from the top pot was always going to be tough.
"The Republic of Ireland tie throws up a lot of intrigue. The fans won't have to travel far which will be fantastic, obviously two ex-Celtic managers coming up against each other, and then you also have the Poland game.
"Poland are a very good side, as are Georgia, but I think we are more than capable of picking up points."
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