The Gunners slumped to a third Premier League defeat of the season on Saturday evening following a 2-0 loss to top-four rivals Leicester City at the King Power Stadium.
Arsenal are in sixth spot in the Premier League table and Emery’s men are eight points adrift of fourth-placed Manchester City in the race to secure Champions League football.
The north London side have only managed to win one of their last six Premier League games to leave Arsenal in turmoil under Spanish head coach Emery.
Former Gunners midfielder Petit believes Arsenal need to sack Emery as the current manager has lost the faith of his players.
“I believe it’s time for Unai Emery to leave Arsenal,” Petit told Paddy Power. “The results are not good at all. I don’t recognise this team anymore and I don’t recognise this club any more.
“Arsene Wenger built this club for 20 years and there was concern as generation after generation came and went. But now they look like an average team without any inspiration or creativity – and I don’t think that’s solely down to the players.
“My opinion is that most of the players have given up on Emery, so it’s time for him to go.”
Arsenal appointed Emery as Arsene Wenger’s replacement in May 2018 after the Frenchman failed to steer the club to a top-four finish in successive seasons.
Petit would welcome the appointment of a club legend as Emery’s successor at The Emirates.
However, the World Cup winner suggested a manager such as Rangers boss Steven Gerrard could be the perfect appointment to restore the emotion and the passion at Arsenal.
“The club needs a great leader now,” Petit added. “Someone who can bring back the passion, someone respected by the players, someone who can fill the team with energy and the winning mentality.
“Steven Gerrard, for example, is like this.
“I want to see passion, emotion. Someone who, when he takes your hand, you can feel the electricity. I want someone who can bring that to the Arsenal dressing room, because they need to wake up.”
Arsenal haven’t finished in the Premier League’s top four in the last three seasons.
MORE: Man United latest news
MORE: Arsenal latest news
MORE: Chelsea latest news
MORE: Liverpool latest news