The 24-year-old will bring his two-year stint with Super Rugby side Melbourne Rebels to an end when he joins Premiership outfit Sale Sharks in the summer in the hope of adding to his seven international caps.
But after the sparkling form of Owen Farrell in the RBS 6 Nations, and the likes of Toby Flood and Charlie Hodgson in reserve, Lancaster believes the No. 10 shirt will be one of the most sought after in the build up to the 2015 World Cup on home soil.
Lancaster said: “Danny’s decision to come back to Sale is great, because he can now put his hat back into the [England] ring. But the reality is he’s come back into a very competitive position.
“We’ve got Owen, who obviously did extremely well in the RBS 6 Nations, Charlie [Hodgson], who but for a finger injury would have played against Wales, and Toby [Flood] who is the most capped player in our squad.
“With those three, and the likes of George Ford, Tom Heathcote, Henry Slade and Rory Clegg and one or two others, there’s a lot of talent.
“Typically, what happens with players is they spend a lot of time looking ahead to the player they’re chasing, who’s ahead of them in the pecking order and tends to be older. What they often don’t see is the player who’s coming up from behind.”
Having coached Cipriani for the Saxons, Lancaster insists he would benefit from another stint with the second team before a possible step up.
And with his own England future yet to be resolved, Lancaster revealed he would only recall the former London Wasps playmaker if his focus was purely on rugby.
He added: “My relationship with Danny has always been good. I’ve probably coached him more than anyone else in the England set-up.
“He’s got to come back and play his way into the Saxons squad, then into the seniors. If he does do that then it is about buying into the culture.
“If people don’t buy into it — it doesn’t matter whether it’s Danny or anyone else — there are plenty of players on the list.”
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