The seven-times world champion Hendry insists O'Sullivan can still overtake him as the game's most prolific winner despite celebrating the last of his five world victories in Sheffield seven years ago.
O'Sullivan has won a record seven Masters and seven UK titles, but remains two behind Hendry in the world title race.
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"If he wants to and his head is right, I think he can win another three or four world titles," said Hendry during an Instagram chat with Alan McManus, who won the 1994 Masters with a 9-8 win over his fellow Scotsman.
McManus believes O'Sullivan, 44, has underachieved in his 28-year professional career despite drawing level with Hendry on 36 ranking event victories and becoming the first player to compile over 1000 career centuries.
"Probably (has underachieved). How many goes has he had at Sheffield? 27 goes or something. He's won it five times which is good," commented McManus.
"He looked like he was never being bothered properly until the early 2000s or something," said Hendry.

White: Even Hendry would tell you O’Sullivan is the greatest

He'll always be a genius, but there seemed to be a time when he was suddenly there to win.
McManus is slightly baffled by O'Sullivan's recent comments regarding the length of the World Championship being too long for him and feels the Essex player should trust in the advice of sports psychiatrist Dr Steve Peters.
"With me, I’m such an emotional player and person, to try and hold it down for 17 days, I’m beaten before I go there sometimes, it’s just not a great tournament for me. It’s like asking Usain Bolt to run the marathon. It’s just not suited to his genes or personality," said O'Sullivan.
McManus is adamant the duration of the event should not be an issue.
"I think we can safely say, can he win another world title? The answer is yes, of course he can," said McManus.
"I don't know about this 17-day thing he talks about. The first week you are only playing one match. I think he needs to get tuned in properly.
That guy Steve Peters seems to help him whatever he does. I would get him in tow and just get on with it.
Hendry says O'Sullivan cannot be blamed for not enjoying the challenge of the World Championship.
"Ronnie admits that he isn't really interested in being there for 17 days. You can't argue with that. If that's how you feel, that's how you feel," said Hendry.
McManus feels a dream final would be an O'Sullivan showdown with undisputed world number one and world champion Judd Trump if the postponed tournament goes ahead behind closed doors at the end of July.
"He's capable of doing it. Whether he can be bothered putting the work in to be able to do it, I don't know it," said McManus.
"It would be good if he gets to play Judd in the final. It would actually be interesting to see Ronnie being the underdog.
"Judd is the top man now, let's face it."
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