The Italian believes that Kramaric will lose another six months of his career if he decides to stay with the Foxes as he is currently down the pecking order behind Jamie Vardy, Leonardo Ulloa and Shinji Okazaki.
The Croatian striker has managed to make only 15 league appearances for the Foxes since his £9m move from HNK Rijeka in January 2014.
Ranieri said: "If he stays I think he loses another six months.
"I spoke with him and if he wants to say I will be very happy, because I think he is a fantastic striker, who scores goals.
"Kramaric has only played a few minutes so far."