The Welsh international defender has been out for over a month with injury, and during that time Slaven Bilic’s side have looked vulnerable at the back.
West Ham have let in nine goals in their last four Premier League matches, and Nicholas feels that Collins’ absence has hurt the side.
“I never thought I’d say this, but somebody like Collins, they’re missing him,” Nicholas said. “He was so steady with [Winston] Reid.”
Collins went into the season with his future at Upton Park firmly up in the air, but he has since signed a new contract.
The veteran defender appeared to be fourth choice in Bilic’s selection order, but he has been rock solid when utilised this season.
Collins broke into the Hammers' starting line-up back in December, and he had established his place before injury struck.
Collins is due to return to training this week, and he is expected to make his return for the London club in the near future.
West Ham's next fixture comes against Manchester United in the FA Cup, before they return to Premier League action with a match against league leaders Leicester City.