Jardine passed away in April after a long battle with cancer and the Light Blues announced this week that he would be commemorated ahead of the first Championship game of the season against Hearts.
The former Gers defender was a member of the 1972 European Cup-Winners' Cup-winning team and appeared almost 800 times for Rangers before going on to serve the club with distinction in a number of off-field roles.
DJ told SportTimes: "I am totally in favour of the Govan Stand being named after Sandy and I am sure the fans will be as well.
"Sandy was a wonderful player, a terrific person and a great ambassador for the club.
He was everything you expect in a Ranger and as wonderful example to today's players.
"To be worthy of something like this at a club like Rangers, you have to be exceptional and Sandy was.
"He was at Rangers for so many years, he was a great player for Scotland and, off the park, he has done so much for Rangers.
"You have got to say that he is a true legend in an age when that word is over used.
"Sandy is one of the all-time Rangers greats and it is fitting to have a stand named in his honour."
Jardine will become only the second man, after legendary boss Bill Struth, to have a stand adorn his name at Ibrox.
And Johnstone reckons the tribute should only be carried out in exceptional circumstances.
He said: "There have been so many legends at Rangers and there are only four stands.
"What worries me is, what happens when some of the living legends, or the big names of recent years, are no longer with us and deserve to have something in their memory?
"There are only four stands and two have been renamed already. Do you start putting up statues?
"But, as I say, I have no problem with this being done for Sandy and I am sure it is a tribute his family will appreciate."