Emmanuel Petit says Arsenal must spend big to compete with Chelsea and Manchester United
Arsene Wenger's Arsenal finished last season outside of the Champions League places for the first time in 20 years.
Man United ended last term below them in sixth but qualified for Europe's elite club competition by winning the Europa League.
Chelsea were 18 and 24 points ahead of Arsenal and United respectively and won the title in Antonio Conte's first campaign in charge.
The Blues and the Red Devils are both notorious big spenders in fees and wages whereas Wenger is known for not splashing out the big bucks on new signings.
However, Petit says that must change if they want to win their first title since 2004.
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I think Arsenal have got a salary cap which means they cannot do whatever they want in terms of wages
Arsenal legend Emmanuel Petit
"They need to out the chequebook on the table," he said on Sky Sports.
"Why? Because you want to compete in the Premier League, when you see how much money Manchester City, Manchester United spend to win the Premier League, and Chelsea on wages as well.
"I think Arsenal have got a salary cap which means they cannot do whatever they want in terms of wages.
"Now they have paid back the loan for the Emirates Stadium, they've got the money in the bank, they're one of the richest clubs in the world and I think financially they have no problems."
Petit believes it would be satisfactory to keep spending at a minimum if there were young players coming through the club's youth system.
Emmanuel Petit says Arsenal must break their "salary cap" to compete for the Premier League title
But he says that is not the case and there are not enough young British players brought into the club's first-team.
"If you don't put the money on the table, then you need the academy to feed the first team," Petit added.
"But since the likes of (Alex) Oxlade-Chamberlain, (Kieran) Gibbs, (Jack) Wilshere, (Aaron) Ramsey, we don't see too many players coming into the first-team, expect (Rob) Holding the central defender, but that's not enough.
"You need good players but good players for me is not enough, you need winning mentality and that is something that is very rare in football."