LOC is one proxy measure for measuring the problem size.
LOC estimate can be used, and LOC count is relatively cheap to measure from historical projects. But LOC can be problematic if used for anything else than a proxy for problem size, as already pointed out by other answers.
Problem size is rather constant given the requirements. From a size estimate you can go to effort, schedule and cost estimates. It depends on your planning drivers such as cost or schedule. From the historical data you can find correlation how problem size translates to effort and how other planning drivers further influence the outcome. So you need to measure size measure and effort vs. other parameters and keep on fine-tuning your estimation process. There are some LOC-to-effort measures available in the literature, but they are not very accurate in your domain, using the technology you are using, and the team you have.
Other proxies for problem size are function points and story points. My experience on function points is that they are rarely worth the effort. On the other hand, story points in agile methods work very well since they are deliberately abstract (thus avoiding a lot of problems with with LOC) and measured on a sprint-by-sprint basis, with instant feedback into following sprints.