The singer said the pair had lunch and he is thinking about returning to his original band.
He said: "It's very possible I'll go back to Blur, it really is very possible.
"The truth be known Graham and I have been hanging out together a bit. We had lunch the other day."
Coxon left the band in 2002 to pursue a solo career while the remaining members went on to record their last release Think Tank, a year later.
Bassist Alex James hinted at a reunion in August 2007.
But when the band met up two months later they revealed on their official site that they "met up for an enjoyable lunch" but there were no "other music plans for Blur".
Albarn said it was good to see his old band member again.
He added: "He's great, it's fantastic to get my old friend back. So it's good but I can't really say any more than that."
Over the last five years, the Blur frontman has become heavily involved with side projects The Good, The Bad And The Queen, Africa Express and his other band Gorillaz who he is currently working with on a new album.
"I'm halfway through the next Gorillaz album at the minute," he said. "That's going to be interesting and different again.
"This next time around there will be a lot going on in it."
Albarn is also in the process of bringing his opera Monkey: Journey To The West back to London after it enjoyed success at the Royal Opera House over the summer.
The show, which is performed entirely in Mandarin, is to be staged in the confines of the 02 Arena from 12 November.Q&A
Damon Albarn said: "After we staged it at the Royal Opera House there was the question of what do we do with it next.
"There was definitely the interest and demand to come back to London.
"We needed to find somewhere else and we were approached by the 02. They asked whether we would like to work with them and bring it back to London.
"So we decided to build our own tent and make our own world. For kids it's a magical other world and for adults they can relax and enjoy themselves."
The opera is based on ancient Chinese stories which feature the character of Monkey, a monk called Tripitaka, half man-half animal Piggsy and Sandy the water demon.
It was turned into a cult TV show in the 1970s.
pic : http://www.thesun.co.uk/sol/homepage/showbiz/bizarre/article1928383.ece