He has an impressive record in Spain, having beaten both La Liga giants to the title in 2013/14, finishing third the past three seasons, and currently competing with rivals Real Madrid to claim the runner up spot this term.
The Argentinian coach has also impressed in Europe, with Atletico winning the Europa League and twice finishing runners up in the Champions League under Simeone's reign.
And it is in the Europa League that Simeone will meet his potential suitors, when Atletico travel to Arsenal for the first leg of their semi final clash.
Former Barcelona coach Luis Enrique and Celtic boss Brendan Rogers have become the favourites to succeed Wenger, who will depart the Emirates at the end of the season. But Neville believes that Simeone would be the perfect fit for Arsenal.
“They have to have a manager who can punch above their weight, and the outstanding candidate for me is Diego Simeone at Atletico Madrid," said Neville, as quoted by Daily Star.
"Season after season he has challenged, not just in the Champions League but in La Liga too, with a team that has a big budget but nowhere near that of Barcelona and Real Madrid."
If Simeone was to make the switch to the Premier League he would be taking on the challenge of trying to bridge the gap to the likes of Manchester City and Manchester United, with what is likely to be a much lower budget at his disposal.
"What the new Arsenal manager is taking on with Man City and Man Utd, and to a lesser extent Chelsea, is huge financial might. £150m, £200m ploughed into the team each season.
"If you're going to compete with that, you have to have an outstanding manager to do so, and Simeone is that manager in Europe at this time. He has continually done it.
"If Arsenal have aspirations to win the league, and are not going to do it by spending, they're going to have to do it by spending less and achieving more. That's difficult, and you need a special type of manager to do that."