The Colombia icon believes that his compatriot is more than ready for the challenge of playing for Real Madrid, and dubbed him a worthwhile investment for any club
The Monaco man was one of the stars of the tournament in Brazil, inspiring Colombia to the quarterfinals of the competition with six goals in five games as it was ultimately knocked out by the host nation.
Since his impressive performances at the tournament, he has been linked with a move to La Liga giant Real Madrid and confessed he felt the Spanish top flight would suit his style.
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Valderrama, who made more than 100 appearances for Colombia and enjoyed a stint in Spain with Real Valladolid, maintains any club in the world would be fortunate to have his compatriot, who turns 23 on Saturday.
"I hope he goes to Spain. There's not much I can add after the World Cup he has just played," he told Marca. "Whoever had any doubts has now seen what he can do. I never had any.
"Not even Real Madrid is too big for James. Look how he played this World Cup [at] just 22 years old, he has shown he can play for any club in the world.
"Great players cost a lot, and he's a great player. He's an eight or 10-year investment and the club that buys him won't regret it, whoever buys him will get their money back."
If he were to join Real, James would form part of a star-studded forward line that includes Gareth Bale, Cristiano Ronaldo, Angel Di Maria and Karim Benzema.
Valderrama insists the former Porto playmaker could feature in either the No. 10 role or on the wing despite the competition for places at Santiago Bernabeu.
"Where he plays best is where he started out at - as a classic No. 10," he explained. "But as the No. 10s of old are now not so useful for most managers, I'd have him out on the wing; he'd be great there too.
"And if he plays alongside fast players, even better, because he has who to lay on the assists to. He moves around a lot and helps out the defense a great deal.
"He's got a long time in him. He's a great buy and will solve a lot of problems."