The midfielder appears to be heading towards the out door at Old Trafford, with a proposed switch to Emirates Stadium set to form part of an agreement to take Alexis Sanchez in the opposite direction.
Mkhitaryan will move on having endured a rocky relationship with Jose Mourinho during his time in Manchester, with the 28-year-old having slipped in and out of favour.
Neville believes a change of scenery will be beneficial to a talented playmaker – especially as part of a team that will embrace his skill set – while he also claims that Arsenal could end up “a better team” for their winter deals, with Pierre-Emerick Aubameyang another mooted target.
The former United star told BBC Radio 5 Live: “I can see Henrikh going to Arsenal and being a fantastic signing for them.
“If Arsenal sign Mkhitaryan and Aubameyang, Arsenal may become a better team, because they will have two really good players.
“We didn’t see the best of Mkhitaryan at United. I’m a massive fan of him.
“We saw glimpses this season, but I didn’t think he would be in Jose’s starting XI.
“He needs to go to a club where he will be allowed to flourish and maybe Arsenal is that club.
“I think it is a sensational deal for United.”
Goal revealed on Tuesday that Arsenal’s efforts to land Mkhitaryan are reliant on United agreeing to pay off his contract – which has another two years left to run.
The player’s agent, Mino Raiola, is also eager to secure a fee for helping to broker the deal.
A move for Borussia Dortmund striker Aubameyang may be slightly more straightforward, although he is another who will demand a sizeable price tag.
The 28-year-old Gabon international has netted 21 times across all competitions this season, with that return achieved in just 23 appearances.