The Reds have done little business in the summer transfer window, with Greek left-back Kostas Tsimikas the only addition made to Jurgen Klopp’s squad.
An approach for Spain international Thiago has, however, been mooted for some time, with the 29-year-old playmaker considered to tick plenty of boxes for the Premier League champions.
Nicol, though, is not convinced those at Anfield need to be adding to their engine room.
There have been suggestions that Wijnaldum could move on before the next deadline passes, with the Netherlands international having entered the final 12 months of his contract and sparked talk of interest from Barcelona.
Nicol hopes the 29-year-old’s services can be retained, with Klopp urged to avoid taking any unnecessary risks with a squad that has been so successful over the last two seasons.
The former Reds defender told ESPN FC: “If Wijnaldum isn’t desperate to leave, then I’d keep Wijnaldum. I don’t understand why you’d change it, because clearly it’s been successful.
“Right now the middle of the park is as strong with regards to physicality and getting the ball back, supplying the front three - it’s one of the best in Europe.
“I think sometimes it’s a little bit dangerous to change things when clearly they’re working.
“I won’t argue that Thiago Alcantara is a fantastic footballer, but is [his arrival] going to upset the apple cart? Why would you gamble right now, when clearly you’re the team that everyone has to beat.”
Nicol is not expecting there to be much movement at Liverpool from this point, with the Reds having already passed on the chance to sign Timo Werner as they seek to carefully manage their finances.
The Scot added: “Clearly when they were trying to sign Werner they thought [they needed a big name], but because of the pandemic, I’m pretty sure the finances are a little tight, and I’m pretty sure that’s the reason Werner ended up going to Chelsea and not coming to Liverpool, because of the money side of things. I don’t think it’s a lack of ambition.
“It would be great to have a player of his known quality to come in, but if the money just doesn’t fit, then it doesn’t fit.
“I’d have loved to have seen Werner [sign for Liverpool], and if Alcantara comes in then he’ll make them better, but right now they’re on top, they’ve got young players that I think the decisions of Klopp and how he sees them as the future will also come into it when they come to signing players.
“I’d have liked to see them sign players, but because of the money it just wasn’t happening.”