The former Gunners striker does not believe that Arsene Wenger's other attacking options are as good, nor are they capable of replicating his goal threat
Walcott was ruled out for six months after rupturing a cruciate ligament in his left knee during the Gunners’ FA Cup tie with Tottenham, which will force the winger to miss the rest of the season and the World Cup.
Arsenal are currently top of the Premier League, a point ahead of Manchester City, but Nicholas believes that no one can replicate Walcott’s impact.
"Arsenal are going to miss him badly," the 52-year-old told Sky Sports. "If Theo had stayed fit until the end of the season, I think he would have got Arsenal the title because his pace can stretch defenders."
"We've got [Alex] Oxlade-Chamberlain coming back, we've got [Lukas] Podolski back and also the very talented [Serge] Gnabry, who I think will be able to replace Theo in that position, but he will not be able to replace the pace or the goals.
"I know he [Walcott] has always said he wants to play centre-forward, but coming in from the right side, he's learnt to play the position really well over the years.
"His pace was the asset that the team will miss more than anything.
"The longer the season goes on the deeper the teams will get and I think that's the asset that Arsenal are going to miss and the goals they will certainly miss."