The Belgian international has stated that he would like to play a more prominent role at Old Trafford after scoring in United's 2-2 draw with West Bromwich Albion on Monday evening.
McGrath believes that Fellaini is suited to a striking role and therefore will not be able to play his best football under Louis van Gaal.
"United fans haven't seen the best of him because he has never really played in his best position. Only probably once or twice has he played up front," McGrath told talkSPORT.
"He showed last night it is possible for him to have a presence at Manchester United but, with the abundance of talent we have got up there, he may never get that chance.
"It is a pity for him that he is put in midfield. He did change the game last night because he put himself about, but I don't think his future would be at Manchester United, I really don't."
Fellaini was brought to United last summer from Everton by former boss David Moyes for £27.5m.