Graham, who managed Arsenal to league titles in 1989 and 1991, feels Wenger has to put on his "magic hat" and find the next Thierry Henry and Patrick Vieira, whom he moulded into world-class performers.
Graham told BBC Radio Five Live's Sportsweek programme: "Let's give Arsene the credit. He brought in players for average prices, Thierry Henry, Nicolas Anelka, Marc Overmars, Patrick Vieira, Emmanuel Petit.
"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."