Having been frozen out at the Etihad Stadium by Pep Guardiola, Hart was allowed to head for Serie A last summer.
A season-long loan agreement was struck with Torino and while the 2016-17 campaign has not all been smooth sailing for the 29-year-old, he has benefited from the experience.
Various clubs are now being linked with a permanent move for the experienced goalkeeper this summer, with the likes of Liverpool eager to return him to the Premier League.
James, though, believes that Hart is good enough to remain in Turin and compete with the iconic Gianluigi Buffon for minutes at the reigning Italian champions.
The former Liverpool and City custodian told talkSPORT: "If I was him, I would be looking at Juventus.
"The difficulty for putting him back in England is where would he go? At the moment there are some very good goalkeepers around in the Premier League.”
James added: "If you look at the England squad, he is the only player who is playing abroad and he is doing well.
"Torino is a tough gig for anybody and he is doing well there. Therefore he is showing that he has the qualities and capabilities to play abroad - why not go and do that for one of the top teams?"
Hart has made 30 appearances for Torino this season and is in Gareth Southgate’s latest England squad.
He did, however, make two costly errors in his last outing against Inter and is still building bridges with the Three Lions following his showing at Euro 2016.