Tottenham Hotspur and Celtic have been linked with the teenager.
Th 19-year-old is one of the Championship's hottest young prospects after netting 17 times last season.
Dembele is out of contract with the Cottagers, prompting speculation over where he'll be plying his trade next season as Celtic join the competitive race for his signature, according to The Daily Record.
Tottenham have been repeatedly linked with the French striker, particularly in January, and McCormack says his former team-mate almost joined the Lilywhites, which is why he suggests a move to Celtic would represent a step down under the circumstances.
"If Celtic manage to sign Moussa, that will be a real coup for them," said McCormack via The Mail. "Wherever he ends up this summer, it will be at a good club.
"I would think Celtic will be doing well to get him. He is 19 years old and, halfway through his first full season playing in our team, he nearly went to Spurs.
"I have to be honest and say that I would be surprised if he goes to Celtic when you think he was close to joining Spurs in January."
McCormack is right: if Dembele was that close to joining Tottenham then a switch to Celtic does not make a great deal of sense.
Then again, Celtic is a different proposition these days following the arrival of former Liverpool boss Brendan Rodgers, but still, a switch to Paradise would hardly be challenging for a player who has proven himself in England's second tier.