The 1997 epic marked Kate’s big international breakthrough, appearing as Rose opposite Leonardo DiCaprio’s Jack.
The British star recently reunited with James on the forthcoming Avatar sequel The Way Of Water which the director feels they are both “eager” for.
He told Radio Times: “I think Kate came out of Titanic a bit traumatised by the scale of the production and her responsibility within it.
“We’ve both been eager over time to work together again, to see what the other is about at this point in our lives and careers.”
The director added: “She’s very large and in charge on set. You’d swear she was producing the film!”
Kate plays Metkayina matriarch Ronal in the much-anticipated Avatar sequel, which is returning to the big screen nearly 13 years on from the release of the original sci-fi epic, which went on to become the highest-grossing film of all time.
James has planned out a further three films, which would bring the Avatar franchise to five in total.
However, confirmed that for the sequel to be profitable, it would have to be “the third or fourth highest-grossing film in history” and if it is not he will have to rethink the future films.
“Go big or home home,” he added of the decision.
Avatar: The Way Of Water is due for release in cinemas on 16 December, while the full interview with James is available to read in Radio Times, on sale now.