The Italian is now without a job after being sacked by Napoli, despite guiding them into the last 16 of the competition.
"Would the big [managers] take Arsenal at the moment? I'm not so sure," Souness told Virgin Sport Media.
"I don't think the next man at Arsenal is going to be the one to turn the corner for them. I think there's a lot of work to be done there, especially with those players.