Market worth 5-10 percent more: Jeremy Siegel

The U.S. stock market will survive the turmoil coming out of Greece, with the Dow Jones industrial average still hitting 20,000 by December or January as long as the Federal Reserve raises interest rates, longtime stock bull Jeremy Siegel said Monday.

He thinks that rate hike will come in September.

If so, "I think the fourth quarter could be the best of the four quarters that we have this year in the stock market," the Wharton School finance professor said in an interview with CNBC's "Power Lunch."

"When I look at all the factors and even interest rates going up, I still think this market is worth 5 to 10 percent more than what we're seeing it sell at today."

About six months ago, Siegel made his call that the Dow could hit 20,000 by the end of 2015. He believes that's where the market should be based on fundamentals, interest rates and projected earnings. However, he noted Monday that "we don't always get there right away."

His prediction that the Dow would hit 18,000 by the end of 2014 came true in December.

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Meanwhile, as the market is carefully following developments in Greece's debt talks, Siegel said there shouldn't be any concerns about contagion.

The cash-strapped country is trying to reach a deal with its creditors. It faces a 1.5 billion euro ($1.7 billion) payment to the International Monetary Fund at the end of June. Euro zone finance ministers concluded a meeting Monday on the crisis and will meet again later this week.

If no deal is reached, there are concerns Athens would need to impose capital controls to avoid a banking crisis.

"If they do have a credit event in Greece, I'm very confident that [European Central Bank President Mario] Draghi will open the coffers for Portugal and Spain and everyone that they've considered to have abided by the rules," said Siegel, who is also a senior investment strategy advisor for Wisdom Tree Investments.

"So we're not going to have a contagion from Greece to the rest of Europe, which would really be serious."

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However, he thinks there is one risk for the U.S. stock market: a poor second half of the year.

"This first half is a disaster," Siegel said.

"We want to see GDP growth really grow north of 3 percent, preferably 4 percent. If we stay in a 2 percent mode then it's going to be very hard for the market to make any headway going forward."

—CNBC's Evelyn Cheng contributed to this report.