Pearce, a former Forest player who also managed the first team for a good chunk of last season, stated his opinion on the current situation at the Championship club on the Goals on Sunday show on Sky Sports 1 on Sunday morning.
"The club need rebuilding, right from the bottom through," said the 53-year-old. "The fans need loving again at the football club.
"This is what Nottingham Forest have got to do at the moment: build the football club, ride out this period of uncertainty in regard to the embargo and not being to sign players, and just calm things down at the football club."
Forest, who are now being managed by Dougie Freedman, have made a disappointing start to the season.
The Reds kicked off their 2015-16 campaign with a 1-0 defeat to Brighton & Hove Albion away from home at the American Express Community Stadium.
Freedman’s side then went down 4-3 to Walsall in the first round of the League Cup at the City Ground, but they bounced back with a narrow 2-1 victory over Rotherham United at home in the league.
In their last two Championship games, Forest have played out a goalless draw with Charlton Athletic at the City Ground and a 1-1 draw with Bolton Wanderers away from home at the Macron Stadium.