The Borussia Monchengladbach great advises the Schalke youngster to ignore overtures from clubs across Europe and focus on his development in the Bundesliga
Goal revealed in January that Arsenal had dispatched representatives to tie up a deal for Draxler, but the two clubs could not agree on a valuation for the playmaker.
Schalke chairman Clemmens Tonnies has admitted the club will not be able to hang onto their star man forever, but Netzer feels it would be best for him to stay in Gelsenkirchen for now.
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"It is not yet decided where the path really leads for Draxler," the 69-year-old wrote in his column for Bild.
"He identifies himself with Schalke, which is currently his sporting home. He is an exceptional talent with great prospects for a bright future.
"But his development is far from complete. For such a young man step into a top European team is difficult. Right off the bat to be a regular is a great challenge.
"Therefore, one must very carefully weigh up the decision because the development options are better for young players, if you are constantly used, instead of only hoping for occasional substitute appearances.
"With Draxler I fell the time is not yet come for a change. I would recommend that he mature at Schalke for a while and continue to perform in the national team.
"Schalke is his home and he is enjoying an atmosphere in which he can develop faster."
Draxler has featured regularly for Schalke this campaign, playing 14 times and scoring once in the Bundesliga, and Netzer feels that, along with Max Meyer, the Gelsenkirchen outfit can establish themselves amongst Germany's elite.
"The aim must be for Schalke to build a team that is competitive and establish themselves in the Champions League ranks," he continued.
"To achieve this, they need to stabilise the structure. Schalke should therefore keep these two players as long as possible in any case."
Schalke, who currently sit fourth in the Bundesliga with 34 points from 19 games, face Hannover on Sunday.