Spurs made Premier League history over the summer when becoming the first side to make no additions to their ranks since the introduction of transfer windows.
Mauricio Pochettino decided that he would not be spending for the sake of it, with there already enough quality on the books in north London.
Murphy believes an injection of creativity on the flanks could have helped to push the club closer to a title challenge, but he also acknowledges that retaining the services of key men was of far greater importance.
The former Spurs midfielder told bwin: “I think Tottenham should have invested in the summer to improve their squad and create competition for places. If Tottenham are serious about competing with Manchester City for the Premier League then they need to sign new players.
“Tottenham should have looked to sign a [Wilfried] Zaha or a Martial, that calibre of player who has got pace and the ability to beat defenders. However, there’s now an opportunity for Lucas Moura to fulfil his potential and become the player he’s long been tipped to become.
“The important thing for Tottenham was keeping the likes of [Harry] Kane, [Dele] Alli, [Christian] Eriksen and [Toby] Alderweireld at the club and they achieved that.”
Murphy, who concedes that Pochettino will need to win trophies in order to keep star players happy in future windows, believes that a lack of movement this summer can be put down to past business.
Spurs have enjoyed considerable success in the transfer market over recent years, with deals for the likes of Davinson Sanchez making those looking for players of a similar ilk jealous.
“It’s very difficult for Tottenham to improve on what they already have,” added Murphy.
“To improve on the players they have, it would cost a lot of money and they’d also be competing against rival clubs who can afford to pay a lot more.
“Chelsea have just splashed out on Jorginho, but he wouldn’t get in Tottenham’s team ahead of [Mousa] Dembele. Liverpool have spent the money on Fabinho, but I’m not convinced he’s better than Dembele either. It’s near impossible to find world-class players who aren’t on the radar of the other big teams but who would be happy to sit on the bench to improve the squad at Tottenham.
“I don’t think Tottenham get enough credit for the signings that they do make. Davinson Sanchez was an incredible buy and he will only get better. He was one of the best defenders at the World Cup this summer.
“Manchester United are having problems at central defender and they will be kicking themselves they signed [Victor] Lindelof while Tottenham got Sanchez last summer. I think he would be in ahead of [Dejan] Lovren at Liverpool as well. Tottenham got him and they haven’t got the credit for it.”