The Blues moved to bring in the striker on a temporary deal from Corinthians last week and also tied up a move for defender Matt Miazga.
Chelsea have struggled to find consistent form in the Premier League this season and head into Wednesday’s trip to Watford in 13th place in the table.
Former Arsenal man Merson was thoroughly unimpressed by the Blues’ transfer dealings last month, and says that the west London club should have offered captain John Terry a new deal.
Merson told Sky Sports: “Pato? What’s he done other than one good year in Milan? He must’ve thought it was a joke when Chelsea rung him up!
“And how can you give Branislav Ivanovic another year and not John Terry? You give him one because he’s John Terry, just to get the fans back on side.
“They’re not going to be playing Champions League football next year and it’s going to be rocky – especially with Pep Guardiola coming in at Man City – so why not give him another year?”
Chelsea booked their place in the fifth round of the FA Cup on Sunday thanks to a 5-1 win at MK Dons and will now host Manchester City at Stamford Bridge later this month.
The Blues are also gearing up for their Champions League clash with Paris Saint-Germain in the Champions League last 16.
MORE: Latest Man Utd news
MORE: Latest Arsenal news
MORE: The latest football news