The former Blues midfielder has claimed that Lampard still has a part to play for the European champions but admitted that he understood why his starts had become fewer in number.
Wilkins hoped that the 34-year-old might come to accept that he would not play every game any longer and choose to extend his current deal.
"He's a valuable character to have around and bring off the bench," Wilkins told the BBC. "This is a 20-goals-a-season player from midfield for the last eight seasons or so, and that's a fantastic return.
He added, "I think Frank will finally accept he is not going to play every game for Chelsea. But there is no fitter footballer for his age, probably in world football, than Frank Lampard."
Lampard has won 10 trophies with Chelsea in the last eight years but has only started four Premier League games this season.
Both he and left back Ashley Cole have been linked with moves abroad to conclude their decorated careers but Wilkins has urged Benitez to make a pitch to keep hold of former West Ham player.
"Frank plays like a 30-year-old, not a 34-year-old," he continued. "I would agree with Frank's assessment that he has two or three years left at the very top level.
He added, "Whether that's playing week in week out, one wouldn't think so. But most certainly he's a great asset to have around the club. It would be rather strange for him to finish his career at another club.
"In my humble opinion if I was manager of Chelsea I would want Frank to sign another contract because I know what he brings to the team and the club."