France forward Martial was expected to leave Old Trafford in the summer after his agent confirmed he was keen to secure a transfer exit.
But the 22-year-old stayed put and has subsequently impressed for Jose Mourinhos side, scoring seven goals in 16 games this season.
Despite his revival, Martial still has a turbulent relationship with Mourinho and is stalling over signing a new contract.
Lauren, who was part of Arsenals infamous Invincibles team, believes Gunners boss Unai Emery should move for Martial if he does not extend his deal.
If Martial doesnt renew his contract at Man Utd, Arsenal would be crazy not to try and snap him up, the former Cameroon defender told Sporting Bet.
Hes a fantastic player and is starting to show what he can really do when given a good run of games.
Martial wont go anywhere without being guaranteed first team football, which I think he would get at Arsenal.
Lauren, 41, also advised Arsenal to do everything they can to sign Ousmane Dembele.
Everything about his style of play matches what Arsenal are looking for, he added.
He isnt getting the playing time at Barcelona, or playing in his strongest position, but Arsenals high intensity will allow him to reach his potential.
Dembele can play on either side of the pitch, which is a bonus and hes showed that he can do it against the big teams, coming off the bench to rescue points for Barcelona.
I would love to see him at Arsenal.