Back in 2015, the Bhoys agreed to sell the Dutch centre-half to Southampton for just £12m ($15m).
Less than three years later, Van Dijk became the most expensive defender in history when making a £75m ($95m) switch to Liverpool.
Celtic are now back in the familiar position of seeing admiring glances being cast in the direction of their prized assets from the Premier League.
Arsenal are eager to land Scotland international Tierney and Nicholas believes a compromise can be reached that suits all parties and leaves nobody out of pocket.
The former Gunners and Hoops forward told the Sky Sports Transfer Podcast:“I’ve read so many different stories the last few days about how they’ve put a value on him, but the fact is that Kieran Tierney plays in Scotland and that’s where the value of the market is.
“I mean, they sold Van Dijk for £12m. So is he a better defender than Van Dijk? No. Is £15m reasonable? I would say that Celtic in the current market could probably get £20m.
“So my pitch would be £20m is a cracking deal for Celtic and it’s also a very good deal for Arsenal. That’s where I see the value.
“People can look and judge in different positions and requirements, and of course I’ve been probably more vocal than anybody else about the need for a whole new back four for Arsenal, but in value terms I find it difficult to break down.
“The reason is; he plays in Scotland, he gets 85 per cent possession at his football club in Glasgow Celtic, but when they go to Europe the team gets found wanting a little bit.
“Kieran Tierney is a fabulous footballer, but he’s got a lot to learn defensively. That’s the issue in value.
“So I think if Celtic get £20m they’ll take it, and I think Arsenal will be relatively pleased with that.”
Nicholas added on the chances of the Gunners getting a deal done: “I thought Kieran Tierney would want to stay at Celtic. He’s a die-hard Celtic fan, they’ve got eight in a row wrapped up, they want to go and do nine, and I thought if Kieran really wanted it, if he does nine then he’ll want to do 10 and get in the history books.
“But the stories I’m hearing here in Glasgow is that he might be keen to move on to the bigger league. That’s really what it’s about, a bigger league.
“Will it make him a better player? Probably.
“There is a question mark about his defensive frailties. But then again, he would be an improvement for Arsenal - there’s no doubt in my mind about that.
“He’s power. He’s got a lot of power. The greatest Celtic full-back I ever came across was Danny McGrain and he’s the closest we’ve ever had to him. Danny could play right-back and left-back, but Kieran is just one-footed, his left foot. He’s got real power, real pace going forward.
“And of course in Glasgow, in Scotland, in the SPFL, that’s domination. His final ball could be a bit better, but I think it has improved.”