De Bruyne struggled in Belgium's opening 2-0 defeat by Italy but contributed an assist against Ireland before delivering a midfield masterclass as Wilmots's side secured a place in the second round with a 1-0 win over Sweden.
"Kevin is laughing again," Wilmots told reporters on Saturday. "He's enjoying his football in spite of everything he's been through.
"He's had to deal with family emotions," he added. "With transferring to a new club and we needed to leave him time to deal with that."
De Bruyne endured an injury-hit first season at Manchester City after moving from Wolfsburg and there was considerable speculation that he would be dropped by Wilmots after a sub-par showing against Italy.
However, after impressing against Ireland and Sweden, the 24-year-old has emerged as one of the leading players in Euro 2016, averaging a tournament-high six key passes per match.
"He can clearly be a key player," Wilmots said. "Kevin wasn't very good against Italy, he was very average.
"But he's getting better in the tournament, he's asking for the ball again, he's taking the initiative," Wilmots added.
Hungary have been one of the surprise packages of the tournament, winning Group F after beating Austria and drawing with Iceland and Portugal, but Belgium are favourites to reach the quarter-finals at the second major tournament in a row.
IMAGE: Kevin De Bruyne of Belgium acknowledges the fans.
Photograph: Laurence Griffiths/Getty Images.
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