The "Frasier" star recalled how he first met his "The Space Between" co-star by chance as a youngster when he bumped into the "Thriller" hitmaker - who died from an accidental overdose in 2009 - at a hotel and told how "beautiful" the bond between the family was.
Speaking to "Extra", he recalled, "I was checking into the Waldorf and there was Michael (Jackson). He was recording something. It was just the sweetest moment."
"He stopped to say hello. We sort of shook hands and he had his little mask on but then she said, 'Daddy.' "
The 66-year-old star then grew tearful as he added, "He just took her in his arms and said, 'Oh, hello, little one.' She was so lovely and it was just beautiful."
"She was the cutest thing and she is still pretty darn cute."
Kelsey recalled being impressed with the way the "Billie Jean" singer handled the attention he received wherever he went.
"Boy, they went after him, took shots at him all the time, and I thought, 'How the hell do you handle that?' I've had my share," he sighed.
"The Space Between", which stars Kelsey Grammer and Paris Jackson, is a coming-of-age comedy from Rachel Winter in her directorial debut.