Sterling's future has been cast in doubt after the England international is reported to have turned down a new contract offer worth £100,000 a week at Anfield.
The winger stated in an interview with BBC Sport that he was not "a money grabbing 20-year-old" and suggested the delay in talks is because he has doubts he can win trophies at Liverpool.
Arsenal have been linked with a move for his services and, although Liverpool boss Brendan Rodgers says the star will not be sold in the close-season, Wright - who scored 185 goals in 288 Arsenal appearances - believes Arsene Wenger should break the bank to land Sterling.
"You can't say 'No' to a talent like Raheem Sterling," Wright told Goal.
"I put it on Twitter - 'Arsene, just go in, offer whatever he wants and play him wherever he wants', because he's someone you can build a team around and the more confidence he gets, the more he's going to do for the team."
Sterling's refusal to extend his Liverpool stay despite the numbers being reported has drawn criticism, but Wright has backed his stance.
"It's a hard one for Raheem," he added. "He's getting all sorts of bad publicity because his contract talks are taking longer than I'm sure Liverpool would like. I think he's making the right decision, simply because he's 20 and has the world at his feet.
"He's at a fantastic football club, no doubt. But when you consider that he's been playing in all sorts of positions, at right wing-back.
"When there are other teams interested who I know would definitely play him where he wants to be played, it doesn't come to money. He wants to play somewhere he can make a proper mark on the game.
"He's got to be careful about saying things like 'I just want to play football and play at a good club', because then the likes of Arsenal or Real Madrid may come in and offer £50million for him but say 'we'll only pay you £80,000-a-week because you said you just want to play football'.
"He's got to be careful in that way because people will twist and turn it around. But I'd like to see Arsenal at least be trying to get someone like Raheem Sterling."
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