"I didn't think she was going to have the courage to step up to the microphone and record, and she did," Bolton told AP Radio in a recent interview.
Bolton, 53, and Sheridan, 42, dated for several years in the early 1990s but reconnected last year. Sheridan's publicist confirmed their engagement in March.
The couple sings the classic love song "The Second Time Around" on Bolton's album, which was released last month.
"It was terrifying for her because she's been self-conscious about singing all her life, but she has a beautiful voice," Bolton told the AP.
He called Sheridan's voice "breathy," and said it was difficult to match their tones.
"What we wound up feeling like we were best doing was creating a dance and merging the two voices," he said. "And I had done my vocal performance first, so she sang along with me. She sang along to me."
Sheridan was married to actor Harry Hamlin from 1991 to 1993. Bolton ended his 15-year marriage to Maureen McGuire, with whom he has three daughters, in 1990.