The Gunners are on the lookout for a new boss after they opted to part company with Unai Emery last week following a poor run of form in all competitions.
Arsenal are currently well off the pace in the race for Champions League qualification and they will be looking to bring in a manager who can help to steer them back towards the top four.
Freddie Ljungberg has taken temporary charge of the Gunners and the north London side will face Brighton and Hove Albion in their next Premier League game on Thursday night at The Emirates.
Nuno has been touted as a possible candidate to take over at The Emirates and pundit Townsend believes that he would be a perfect fit for the north London side.
Speaking in an interview with BBC Sport, as quoted by the Daily Express, Townsend said: “He’s the one I think would be perfect for Arsenal. I personally think Nuno would be great for Arsenal, I really do.
“When I see the job Nuno has done at Wolves, getting them promoted, making them a seriously good team to watch.
“He’s spent a lot of money, with the Mendes links that they have they will always be in and around good players.
“But I like the way he sets his team up and the way that he plays. He has improved Ryan Bennett, Conor Coady, good, honest players.
“They have become very good Premier League players. He has taken them on another level.
“He looks to me that sort of coach who really wants to get into a player’s head, turn them around and work with them.
“And some of the Arsenal boys need that.”
Arsenal finished in fifth place in the Premier League table last season and reached the Europa League final under Emery.
However, the Spanish head coach was given his marching orders last week in the wake of a home defeat by Eintracht Frankfurt in the Europa League at The Emirates.
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