The Gunners boss has been facing his toughest spell of his 21-year reign at the north London club following a disastrous run of results in the Champions League and the Premier League.
Arsenal lost 3-0 to relegation-threatened Crystal Palace at Selhurst Park on Monday night to leave their top-four prospects in doubt with eight games to go in their season.
The north London side have lost their last four Premier League games on the road following defeats by Chelsea, Liverpool, West Bromwich Albion and Crystal Palace.
Wenger’s current deal is set to expire at the end of the season and the French coach has refused to shed light on whether he will sign a contract extension.
Keown was part of Wenger’s last title-winning squad when the England defender helped Arsenal to avoid defeat throughout the 2003-04 season.
However, the former Arsenal defender believes the uncertainty surrounding Wenger’s future has affected his squad’s performance.
“I feel Arsene Wenger has underestimated his greatest value as a manager,” Keown told the Daily Mail.
“No manager I played for had more belief in me than Wenger. When a manager has that much trust in you it generates an extra 10 or 20 per cent in your performance.”
“If there had been such uncertainty about his future while I was playing, that X factor might have fallen away.”
Arsenal are in sixth place in the Premier League table and seven points behind fourth-placed Manchester City.
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