Ramsey's contract is set to expire in June and Arsenal could have to cash in during the January transfer window.
The midfielder continues to feature for Arsenal's first team, scoring in a win over Fulham this weekend.
Collymore says Ramsey needs to move on, to freshen up his career and that Wolves should be an option.
He said: "It's the right time for Ramsey as well, because you can stay too long at a club and he could easily go to a top-six side and be a very good option, or to an upwardly mobile club such as Wolves and add even more quality."
Wolves won promotion to the Premier League last season and have made a big impact upon returning to the top flight.
They have lost only once and claimed a draw with champions Manchester City.
They currently sit in seventh place, two points above Manchester United.
The decision Ramsey faces is the biggest of his career.
He has been linked with moves to Liverpool, Manchester United, and according to The Sun, Real Madrid are keen.
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