The Togo international was used just eight times in the league by City boss Roberto Mancini this season before joining Real Madrid on loan and Wenger, who had the 26-year old for three-and-a-half seasons, says it was a waste of pure talent.
"Adebayor didn't play anymore, he is a talented player and it's a waste for him not to play," he told Arsenal's official website.
"It is a good decision from Adebayor and a good decision from Real Madrid, in my opinion.
"Adebayor needs to gain confidence again and play at his best because he was going nowhere at Manchester City. Both can be winners."
And Wenger said there was no hard feelings with Adebayor when he departed North London in July 2009.
"He is a nice guy. When a player doesn't do well somewhere, his character is questioned straight away,” he added.
"Overall, he is not a difficult guy. We had no problem with Adebayor on a daily basis.
"He was likeable, he did his job well."