Television pundit believes his old boss cannot escape criticism
The Gunners floundered towards the end of the this season, missing out on the Premier League title or any other trophies for the fifth season in a row.
And Dixon, who was a member of Arsenal's double-winning sides in both 1998 and 2002, believes his former manager has finally realised some of the weaknesses he has allowed to develop within his side.
"There's been a huge amount of negatives this season: not competing at the top - getting back into the title race twice but dropping out - the lack of consistency and not being good enough when not in possession,' Dixon told the Daily Mail.
"Arsene has given the youngsters a period of time but I’ve heard signs from him that it hasn’t worked. So he’s going to do things differently this summer.
"Wenger has moved forward in his attitudes towards his team. You can’t turn a bunch of kids into champions and he realises that now.
"Any Arsenal fan should be happy with that - he's finally accepted what's wrong with the team and has plans to change it."
Wenger has stated this week that he plans to add a defender to his squad in the summer — but Dixon believes the squad needs at least four new additions across the board.
"In terms of depth of squad Arsenal can't compete and he certainly needs to bring in four players - four that can come in and play," Dixon stated.
"A forward, a keeper, a centre-back and midfielder are the obvious targets. Mikael Silvestre is, putting it mildly, past his best and is Johann Djourou the player you want to hold the back together? I'm not so sure.
"Nicklas Bendtner has been thrust in to the forefront of Arsenal's season but I don't think he's good enough to play as the focal point just yet.
"I think he can develop into a good player but the big mistake was not buying someone in January when Wenger knew Robin Van Persie would miss the rest of the season."
Looking to England, for whom Dixon won two caps during his career, the former right-back believes manager Fabio Capello deserves credit for his sensible provisional selection.
"I'm glad Capello hasn't surprised us with untried players like Theo Walcott as Sven Goran Eriksson did in 2006," Dixon said.
"And I certainly think the pairing of King and Dawson have played themselves in this second half of the season.
"Dawson is playing better than any of the other centre-backs in contention. John Terry hasn’t been in great form and Rio Ferdinand's continuing injuries are a worry."
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