Torres has scored four goals in 11 Premier League appearances this season, but Gullit has not been impressed by the 28-year-old.
"If he can't still do it at Chelsea, then they are going to have to look somewhere else," said the Dutchman. "I think Falcao is a very good striker.
"I said at the beginning of the season that Chelsea might need another striker but obviously they wanted to give Torres a chance. If he has taken it, I don't know."
Falcao, 26, who has three years to run on his current contract, has netted 13 times in his last 10 games for Atletico.