The Gunners host Nottingham Forest in the third round on Tuesday night as they start their campaign at the Emirates.
"I think he mixed the team with experience and youngsters," Parlour said of Arsenal's run to the quarter-finals in last season's Carabao Cup.
"There is no problem with that, it is good to give the youngsters game time and they have some very good youngsters at Arsenal - Reiss Nelson, (Ainsley) Maitland-Niles, Joe Willock and Emile Smith Rowe. It is great to see players like that come into the team.
"But you can also see how important the competition is to teams like Manchester City and it is another trophy to talk about at the end of the season.
"There are a lot of games and you get injuries through the season so it is a bit about balancing the squad."
He added: "The big teams have got bigger squads but it still baffles me when you get to the latter stages of any cup competition and rest players.
"If you ask any fan around the country and say 'do you want a Wembley day out to go for a cup and win a trophy' they would say 'yes, definitely'.
"I'm really surprised sometimes when teams rest players. It was the first ever trophy I won as a player and I really enjoyed it and now Emery could make it his first title in England as well."