Wilshere has been tried in a deeper role for England following Steven Gerrard's decision to retire from international football.
But Parlour, who played for Arsenal between 1992-2004, told Vauxhall England: "I really believe his best position is more of an advanced midfielder.
"His game is best when he is doing those little one-twos around the penalty box.
"He knows exactly when to give it, he holds onto it enough and he does those driving runs forwards - I think that is Jack Wilshere at his best.
"I always think you've got to be playing on a regular basis in that regular position if you're going to be playing for your country. Roy Hodgson has got to make a big decision.
"Certainly I believe Jack Wilshere's position is more advanced and Roy will have to look into the further we get into the group and obviously in two years' time in the European Championships.
"Who plays there, I don't know. It is a situation where there is a big decision as to who play there, but at the moment I'd like Jack further forwards, around that penalty box, creating chances."
For the big stories and the banter follow us on Twitter: @tribalfootball