"One of my cousins was interested in her (Bhutto) and she also took an interest when I introduced them to each other. At one point, marriage was virtually on the cards," Mr Khan told Frank Huzur, his Indian biographer.
Mr Khan, who now heads the Pakistan Tehrik-e-Insaaf party, described Ms Bhutto as a "personal friend" and said there was "mutual admiration between them".
According to him, Ms Bhutto had an affair with the "spotlight".
"She trusted my instincts for counsel. Politics was not her calling, but she was able to make it her calling. She would have made a great ambassador for Pakistan," Mr Khan is quoted as saying in an excerpt from Huzur's book "Imran Vs Imran".
"Talking glibly came easy to her. Retorting is not everyone's forte. Benazir had the ability to retort with thunderous impact followed by one of her crystal-eyed stares. She wanted to stay in charge for ever," Mr Khan said.
Nearly two years ago, author Christopher Sandford claimed in his biography of Mr Khan that Ms Bhutto became infatuated with Mr Khan during their student days at Oxford University in the 1970s and the pair enjoyed a "close" and possibly a "sexual" relationship. Mr Sandford also claimed Khan's mother unsuccessfully tried to organise an arranged marriage between the pair.
In "Imran Vs Imran", Mr Khan further said: "When Benazir was sworn in as the first Muslim (woman) prime minister, I thought I had lost a friend to the murky game of power politics. I enjoyed her confidence."
He added, "...While among friends, she would brag about her father's political skills. A number of us would chuckle over her confident brag, but she would put up a sparkling show. In Oxford debates, she would roar over the issues of human rights abuse, rule of law, gender justice, discrimination and fiscal corruption. But when she found herself in the middle of the power pitch, she metamorphosed into a venal, self-centred political empress. She tasted the blood of power, and got drunk."
Ms Bhutto was killed by a suicide bomber shortly after she had addressed an election rally in the garrison city of Rawalpindi in December 2007.