Murray, 36, won 12 of the last 13 games to secure a convincing win over his fellow Brit.
The two-time champion said afterwards that it’s “been a long time since I’ve felt physically this good coming into Wimbledon”.
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“This is as good as I have seen Murray play for a few years, the way he is moving and his attitude,” said Wilander.
“He was calm, maybe because he was playing against a British player…It’s so much easier for him to do it on a grass court because he can keep the ball low and that slice works and he reads the game so well.
“You look at his draw and you start dreaming a bit that he can go very far.”
They will continue on Wednesday with Thiem having taken the first set.
Murray could then potentially face 32nd seed Ben Shelton in the third round.
Looking ahead to Murray’s next match against either Thiem or Tsitsipas, Wilander added: “I think that for him it’s really important to play players with that style.
“They are pretty similar in their styles and as long as the grass is green and the bounce is a bit lower it’s easier for him to play these guys. He will find their weaknesses.
“They serve good but don’t serve great. For me it’s a perfect draw for him.
“It’s much more difficult to play him now than in the quarters or semis when the courts have dried up I believe. It’s a perfect draw for me.”
Murray had to withstand early pressure against Peniston before taking control of the match.
The former world No. 1 saved two break points in the early stages before getting his first break in the sixth game of the match.
Eurosport expert Laura Robson thinks Murray might have taken time to get going as he didn’t have the chance to hit beforehand.
“Whether that lack of 20 minutes where he comes on the court sweating made a difference, combined with the nerves of playing on Centre Court again, I think it must have done.
“It’s never easy playing someone you know so well and he would have wanted to well. He’s been working away at the Challenger level to get back to his best for this tournament and it’s a lot of pressure to put on yourself.
“So I imagine those first few games were just letting the nerves out and getting used to the emotions of playing at Wimbledon again.”
Murray said afterwards that it was “amazing” to have the Princess of Wales and Federer in attendance.
“It was amazing to have some royalty here and some tennis royalty as well. It’s amazing to have Roger here supporting the event,” he said.
“The last time I was on this court and he was watching it, it was the Olympics and he was sat in Stan Wawrinka’s box supporting against me. I hope you are doing well Roger.”
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