The Manchester City midfielder may leave the club when Pep Guardiola takes charge.
The Ivorian has come in for stern criticism once again this season with a series of lacklustre performances in a disappointing campaign for his side.
There have been suggestions he will leave in the summer also, with incoming manager Pep Guardiola having sold Toure to City when they were together at Barcelona.
Should that happen again a move away from the Premier League is expected, but Pearce believes Arsenal should move to add him to their squad instead.
"On his day Yaya Toure is outstanding," Pearce told talkSPORT.
"Petr Cech has proved a fantastic success this year at Arsenal, and to have a player like Toure at the centre of midfield, as that holding type of player, I think he’d give one or two of the youngsters a bit of a lift.
“I think he’d be a good signing for them."
Signing Toure would certainly be an interesting transfer move from Arsenal should it happen.
On his day there is no denying his quality, as has been shown on numerous occasions during his time at the Etihad Stadium.
However, as has been demonstrated in the last couple of campaigns he can sometimes be a liability to the team with is failure, or apparent lack of desire, to do the defensive work necessary.
That is something that will not have been missed by Arsenal manager Arsene Wenger, who may think it would be too much of a gamble to sign Toure.