Reading the write up on your router it should be able to cope.
It seems from blogs I have read that the x-box would be much better if attached by an ethernet cable to the router as it is prone to interference from all sorts of things and wireless is not brilliant for gaming. If this is not possible the advice is to try a homeplug which extends the wireless signal.
It is also advised that you perhaps change the wireless frequency of the router - a default setting is 6 so you should perhaps try 9 or 11. To do this you will need to type in the url of your router (may be 192.168.0.1) into the address bar at the top of your browser - this should take you to the home page of your router - you will need your passwords - default usually set to admin/admin unless you have changed it. You should then be able to navigate to settings.
At the same time you could check to see if your router's firmware is up to date.