With Gracia in charge during the 2018/19 season, the Hornets avoided relegation and made the FA Cup final for the first time in 35 years.
The Spaniard was sacked just four games into the following season, but Watford were still unable to evade the drop.
"In the present tense, I don't think they are good enough to be make an important difference to the club now."
Los Che have won just one in their first three La Liga games, and Subirats thinks it is a 'big step' for a manager of Gracia's experience.
He added: "My opinion is that it's a great opportunity for Javi Gracia. Both in Spain and abroad, he has already demonstrated his capability as a manager with other football clubs.
"However, it is clear that managing Valencia CF is a very big step up and a very important one too.
"Perhaps he has arrived at a time when the situation with the squad is a bit complicated. He is going to have some problems to make it an effective season.