Wilshere was overlooked by Gareth Southgate in the latest England squad for friendlies against Germany and Brazil, because he felt the midfielder has not been playing in his best position for Arsenal this season.
The 25-year-old has featured in just two league games so far this campaign, but Southgate has suggested he needs to be playing more regularly and in a deeper role if he wants to win his place back with the international team.
Merson believes that his best chance of achieving this is with a loan move abroad.
"He [Southgate] has called up Jack Cork, who I like and think is a good player, but Jack Wilshere has got to move.
"It is alright Arsene Wenger saying a fit Jack Wilshere gets in the England team, but you have to play for Arsenal. But at the same time, [Jesse] Lingard has started less games than Wilshere.
"The way he plays, I think going abroad probably suits him and his game, otherwise he is going to go to a relegation-battling team, and that is not his game.
"He needs to get on the ball and play football and be in a team that really are going to have a lot more of the ball than not. So probably abroad to an AC Milan or somewhere like that."
Southgate opted for a young and largely inexperienced team against Germany at Wembley on Friday evening, with Jordan Pickford, Ruben Loftus-Cheek and Tammy Abraham all making their England debuts, but Merson, a former England international, is concerned that a heavy defeat against the world champions could scar the new boys.
"I'm pleased for him [Loftus-Cheek]," he said. "I like him, I am a big fan of his. I thought fair play for him to go to [Crystal] Palace and I am pleased he got in the team.
"He is a good player, good physique, gets around the pitch. It will be interesting, but I hope he does well as I do like him.
"We have a few people making their debuts against one of the best teams in the world, so you just hope that they put on a good show.
"You do not want them to get set back - we go back a few years to Ryan Shawcross, who came up against Zlatan Ibrahimovic and never played again for England.
"We have to be careful and look after these lads and not really judge them by this game."