Yes, you can use an existing partition as a VM disk image. Moreover, you can have two OSes installed on regular partitions and cross-virtualise them. I mean, you decide which OS boots up using GRUB or compatible and then virtualise the remaining one in seamless mode. One of my PCs has exactly this configuration: I can run Windows programs in VM from Linux if I decide to start the latter or Linux programs if Windows is the host. It requires some sector remapping, though. The VM will do that for you and it boils down to a text file, but finding out its content is a bit tricky.
Best regards, Piotr