The Frenchman is under fire after a string of negative Gunners results and the fact he has not won any silverware since the 2005 FA Cup.
Graham is well aware just what Wenger has done for the club since he took over in 1996 but he feels he needs to revisit his heyday and improve the overall standard of things at the Emirates Stadium.
"Let's give Arsene the credit. He brought in players for average prices, Thierry Henry, Nicolas Anelka, Marc Overmars, Patrick Vieira, Emmanuel Petit," he told the BBC.
"They were all very good players unknown to the fans in England that he turned into fantastic world-class players. That was his strength.
"He did it on a tight budget so it's not like they are now going to go out and break the transfer record.
"They have never done it during Arsene's reign so in my opinion he has got to get his magic hat on again and go out and see if he can get players of that quality at good prices.
"Arsene's first period at the club, for seven years was probably the most attractive and attacking football I've ever seen in English football.
"He won three league titles and four FA Cups. He set the standard and unfortunately in the last few seasons the standard is just slowly slipping away."