The 68-year-old believes that the midfielder should be made his side's key man, despite his current stand-off over a new deal
The Germany international is currently locked in a stand-off with the Bavarian club over a new deal and has been linked with a move to Manchester United, with his current contract set to expire in 2015.
However, the 68-year-old, who led Bayern to a historic treble last term, believes that his old charge could become the figurehead of Pep Guardiola's side and should stay put.
"He shouldn't leave Bayern, not even for Barca or Madrid," he told Kicker.
"He can win everything with this side over the next four years and needs to be playing as the head of the team."
Kroos' brother, Felix, who plays for Werder Bremen, hinted this week that Manchester United are interested in signing the 24-year-old.