The RB Leipzig star has been linked with moves to both clubs.
But Berbatov, who starred in England and Germany, thinks Werner should stay in his homeland.
"There have been reports about Bayern Munich's interest in Timo Werner, and having played in the Bundesliga, Munich are up there with the biggest names like Real Madrid, Manchester United, Barcelona, Manchester City, Juventus and so on," former Manchester United forward Berbatov told Betfair.
"Every season they are up there in the Champions League and they have been dominant in Germany.
"To be honest, it looks like a sensible move for Werner, he knows the league, they know him there, he can get used to his surroundings a lot easier.
"The only thing for me that I may question is if he goes there, he will have a lot of competition to face in Robert Lewandowski, Serge Gnabry, Kingsley Coman and potentially Leroy Sane, who they are also linked with, so there are a lot of similarities for one or two positions.
"But, like I said, it makes more sense for him to go there than move to England where it will probably take him a bit more time to adjust to things."