The Gunners suffered a blow to their Premier League title hopes on Saturday when they were thoroughly beaten 3-1 by Chelsea at Stamford Bridge to leave Arsene Wenger’s men 13 points behind the leaders.
Spurs, meanwhile, are currently second and nine points behind Chelsea as the Lilywhites look to secure a top-four finish for the second straight season.
Tottenham ended up third in the table and behind Arsenal in second last season despite being Leicester’s closest challengers for the title last term.
And Nicholas is backing Spurs to finish above their bitter local rivals this time around, behind champions Chelsea and second-placed Manchester City.
Former Arsenal man Nicholas told Sky Sports: “I have to say it’s getting tremendously interesting, if a bit tense for me. Arsenal always seem to do this and then end up in the top four. Yes, they are out of the title race now but I thought they were before the weekend.
“As the form stands right now it’s obviously Chelsea, then Manchester City with the new superstar Gabriel Jesus, even if they still look susceptible at the back. Is he the replacement for Sergio Aguero? He is certainly providing the goals at the moment.
“Then I think Spurs will be in the top four. I’m not like some Arsenal fans in focusing on finishing above Spurs though. You don’t get prizes for finishing above your rivals unless they finish second.”
He added: “I’m going to stick with the current four but I have to admit I’m really, really sketchy about Arsenal falling out. If I’m being honest with myself then Arsenal are in real danger.”
Tottenham are currently gearing up for their crunch Premier League clash against Liverpool at Anfield on Saturday afternoon as they look to continue their title push.
MORE: Man United latest news
MORE: Arsenal latest news
MORE: Chelsea latest news
MORE: Liverpool latest news