Those restrictions were put in place to try to slow immigration from non-EU countries as politicians came under pressure because of migration from Europe.
Khan avoided saying whether he agreed with former mayor Boris Johnson's proposal for freedom of movement between Commonwealth nations such as New Zealand, Australia, Canada and the UK.
However, he said for all the challenges Brexit presented there were also opportunities for countries such as New Zealand in areas such as trade.
He did not want New Zealanders to think London could not be a home.
"Our strength as a city is the people who come here.
I firmly believe that includes the diversity that comes from New Zealand. Your energy, your enthusiasm, you contribute to London being the greatest city in the world and that needs to carry on."
What we don't want is a toxic, hostile environment being created so people in New Zealand are under the mistaken impression that we are going to somehow become insular, inward looking. No, no, no."
Khan said he had campaigned to remain in the EU, and while Brexit presented challenges there were also opportunities.
Ardern said they had discussed Brexit and the expat community there. She was due to meet with British Prime Minister Theresa May later in the day and expected to discuss free trade agreements.
He said Ardern's time in London in the mid 2000s qualified her to be a Londoner: "the friendship between London and New Zealand will go from strength to strength now we have a Londoner as Prime Minister of New Zealand."
Khan was clearly an admirer of Ardern, saying he spent most of the meeting "gushing about how privileged I was to meet your Prime Minister."
It prompted a quip from Ardern "it didn't cost much to get that answer either."
Khan said he had celebrated Ardern's ascendancy to Prime Minister: "Us progressives celebrate when progressives do well."
Khan presented her with a Paddington Bear and Ardern said she was also given a Berlin bear.