In what is an open renewal of the two-mile showpiece, the seven-year-old heads the market to go one better than in the Neptune Investment Management Novices' Hurdle and gain victory on his third outing at the Cheltenham Festival, having finished fourth in the 2015 Champion Bumper.
The JP McManus-owned gelding, who will be ridden for the first time by Mark Walsh, has won each of his three starts this season, the most recent in the Kingwell Hurdle at Wincanton.
King said: "He is in the best form I've had him all season, whether that is good enough to win a Champion Hurdle, I'm not sure, but he will certainly be in the mix.
"In general my horses are in better form than last year. Considering the form they were in, for him to finish second says a lot for the horse."
The Barbury Castle handler will be double handed with Kingwell third Sceau Royal also taking his chance.
He said: "I was disappointed with him at Wincanton. I thought Yanworth was very vulnerable that day. Between the last two it looked like he was going to win, but he did finish a bit weakly.
"He did have a good blow afterwards, whether that was because I had been easy on him as he hadn't run since November. He is in very good form, but if he couldn't beat Yanworth at Wincanton he won't beat him at Cheltenham."
Nicky Henderson feels ground conditions will play a pivotal role in the chance of his three representatives Brain Power, Buveur D'Air and dual runner-up My Tent Or Yours, as he seeks a record-breaking sixth success.
Henderson said: "The important thing is going to be the ground. Between our lot Buveur D'Air is the one that really loves soft ground and My Tent Or Yours and Brain Power would prefer better ground.
"It looks as if the pendulum is swinging towards them. It's not that Buveur D'Air can't go on good ground, he just loves it soft and if it is like that he has got an advantage over the other two.
"My Tent Or Yours has been there and done it and is in great form - he has had a good freshen up since the Christmas Hurdle. He worked well at Kempton and I'm very happy with where he is.
"Brain Power is very talented, this is a big step up from handicap up to a Grade One but there hasn't been a suitable opportunity to run him since he won at Ascot because of the ground.
"He likes to race when fresh, experience better ground and is going the right way. On good ground he would have the advantage over Buveur D'Air."
With Annie Power and Faugheen both absent, the main hope of a fifth successive victory for an Irish-trained runner looks to be the Henry de Bromhead-trained Petit Mouchoir, winner of the Irish Champion Hurdle.
Although Willie Mullins is without his stars of previous years, the Closutton handler still has two darts to fire in the form of Footpad and Wicklow Brave.
Sam Twiston-Davies is hopeful of another big effort from Festival stalwart The New One, who is trained by his father, Nigel, and bids to win the race at the fourth attempt.
David Pipe feels Moon Racer is worthy of a place in the line up after a decision was made at the weekend to run the lightly-raced eight-year-old in the Champion Hurdle as opposed to the Supreme Novices' Hurdle.
He said: "People will have different views on running him, but there you go. You could argue he's not got much experience, but he schooled well around Wincanton and is in good form. It's a very sporting gesture by his owners.
"He's a deceiving horse at home. He covers a lot of ground and does it very easy."
The 12-runner field is completed by Ch'tibello from the yard of Dan Skelton and the Malcolm Jefferson-trained Cyrus Darius.