The Villa legend should work alongside the club's new manager, the pundit says.
Remi Garde recently left Villa and a new manager will be appointed in due course.
But Merson doesn't just want the right head coach in place - he wants a popular choice within the backroom staff, too.
He told Sky: "I'd be looking for the manager with the best credentials in securing promotion, which Nigel Pearson obviously achieved with at Leicester and Mick McCarthy has with Wolves and Sunderland. He's also doing a tremendous job at Ipswich with very little resources.
"I'd also be quite keen to see Ian Taylor involved with the coaching staff as he's a massive fans' favourite."
As far as supporters will be concerned, there's little wrong with Merson's suggestion.
Whether it'll happen, of course, is a different story. Appointing Taylor to the staff would show a link between the club and fans and that's something that's been non-existent at Aston Villa in recent seasons.
It's almost as if anything that will link supporters and management is treated as a bad thing at Villa Park.
The right appointments in terms of coaching, though, could prove vital for Villa. At the end of the day, several clubs have bounced straight back up after relegation and there are plenty of managers out there who could make that happen for the Midlands club.