Martin Keown says Mikel Arteta must be given money "to develop" the Arsenal team this summer.
The Spaniard has instigated an upturn in fortunes at the Emirates Stadium since taking charge in December.
The Gunners have only lost one of their last 12 encounters in all competitions, although that defeat by Olympiacos led to their elimination from the Europa League.
However, Arsenal booked their place in the quarter-finals of the FA Cup with victory over Portsmouth on Monday.
And they still have an outside chance of qualifying for the Champions League through the Premier League, particularly if Manchester City's European ban is upheld by the Court of Arbitration for Sport.
Arsenal are currently eight points adrift of fourth place but only five behind fifth spot, which would be enough for a Champions League place if City are suspended from the competition.
And Keown has called on the club's owners to loosen the purse strings when the transfer window reopens this summer.
“Arteta has got to be allowed to build the team,” the former Arsenal defender told Goal. “He’s got to be given money to develop.
“Do the owners need to be put some of their own money in? Obviously there are limits to the losses the club can run at, we know that with Manchester City in recent weeks and what they’ve gone through, but expenditure needs to be made in the team.”
Arsenal must also decide whether or not to retain the services of Alexandre Lacazette and Pierre-Emerick Aubameyang, with both players set to be out of contract in 2021.
And Keown believes the club must avoid a repeat of the situation involving Mesut Ozil, who was handed a £350,000-a-week deal in 2018 but has not been as effective since.
“Key decisions need to be made [with Aubameyang and Lacazette],” he added. “Are they going to stay or not? Do Arsenal have to face up to the prospect of perhaps losing Aubameyang? I wouldn’t want to see him go, but they don’t want to be held to ransom either.
“You could argue with Ozil that’s what happened because at the time [Alexis] Sanchez and Ozil were two big players and they didn’t want to lose both so they invested heavily in Ozil.”
Arsenal return to Premier League action against West Ham on Saturday, before a trip to Manchester City on Wednesday.
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