The midfielder ended up staying at Stamford Bridge this summer despite having been linked with a move away from the west London club in search of regular playing time.
Loftus-Cheek spent last season on loan to Crystal Palace and impressed during his spell with the Eagles.
He was rewarded for his fine performances with a call-up to the England squad for this summer’s World Cup in Russia.
With competition for places in Chelsea FC’s midfield stronger than ever, it was thought that Loftus-Cheek could have been set for another move away from Stamford Bridge this season in search of regular playing time.
However, he has ended up staying at the club and will now fight for a first-team place under new manager Maurizio Sarri.
And Merson has admitted that he feels sympathy for Loftus-Cheek, who should be focusing on getting regular playing time at this stage of his career.
Speaking to Sky Sports, Merson said: “He should play more,” Merson told The Debate on Sky Sports.
“He’s unlucky and I feel sorry for him because he’s just a little bit short of getting in the Chelsea team.
“But they won’t let him go out on loan because he’s still a good player, so it’s a hard one.
“Fabregas is not playing at the moment, and if Pedro doesn’t play then Willian plays and vice-versa.
“Chelsea have got a good squad, it’s a shame on the lad. But what do you do? You’re at one of the top clubs in England.
“Do you say ‘Alright I’m going to leave’ and then join a team if relegation candidates but at least play every week?'”
Loftus-Cheek has made two appearances from the bench for Chelsea FC so far this season.
Chelsea FC will host Cardiff City at Stamford Bridge in their next Premier League game on Saturday afternoon.
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