Cole is set to leave Chelsea after confirming that the club are not interested in offering him a new deal, and Powell believes that their Premier League rivals could take the opportunity to secure the 33-year-old's services.
"Ashley has played at the top for his whole career, first at Arsenal and now at Chelsea," the former Charlton Athletic manager told Sky Sports News.
"There are rumours that they want a left-back at Liverpool and at Manchester United but whether they will go for experience or whether they will go for a younger player, we'll have to wait and see.
"But he could easily fit into those clubs no problem. He is absolutely capable of doing a job in the Premier League for the next two or three years."
United are believed to be targeting Southampton defender Luke Shaw.