Bale has been linked with a summer move to Real Madrid, but the former Everton stopper, who won 92 caps for his country, believes that the 23-year-old is in the right place to continue his development.
The 54-year-old told The Express: "I think he will stay at Tottenham and I think he should stay at Tottenham – but if they don't expand, he should leave.
"To be recognised as one of the best players in the world, you have to be playing at the top level – but I don't think that's a reason to leave Tottenham. At the moment, it's the right place for him to express himself.
"He's young enough now to go abroad and learn a new language and, if he leaves, he has got to go to Spain. That would be a massive opportunity for him to learn about himself and the game, but he shouldn't do that for another couple of years."
The former Southampton trainee has scored 22 goals in 37 appearances for Spurs this season.