The former Wigan Athletic starlet has steadily developed into one of the best left-backs in England, if not the world, and enhanced his reputation on Saturday by scoring two stunning free-kicks in the Toffees' 3-2 victory at West Ham United.
Former Goodison Park supremo David Moyes wanted the Merseysider to follow him to Old Trafford over the summer, but the Scot only succeeded in snaring Baines' team-mate Marouane Fellaini for £27.5 million on transfer deadline day.
Pallister made 317 league appearances for the Red Devils from 1989-98, winning four Premier League titles and three FA Cups, and he believes the England international "would be perfect for Manchester United".
Speaking exclusively to FourFourTwo, he said: "He is a terrific player and would be perfect for Manchester United. You saw that on the weekend with his two outstanding free-kicks at West Ham and I think he has grown in stature since establishing himself in the England squad.
"He has put a lot of pressure on Ashley Cole and he would get into a lot of international teams as he has a great deal of quality."
And the former Middlesbrough centre-back, who won 22 caps for his country, expects Moyes to make a fresh move for the 28-year-old.
"I am sure that David Moyes will revisit the transfer options regarding Leighton Baines come the next transfer window and try to lure him away from Everton."
Gary Pallister was speaking ahead of the third round of the Capital One Cup. For more information go to www.capitalonecup.co.uk
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