The Argentina forward is a free agent after his contract with Juventus expired.
He had been expected to join Inter but no move has materialised, leading to reports he may go elsewhere, with Milan, Roma and even newly promoted Monza among the teams linked.
Sacchi said he suggested the Rossoneri sign Dybala – along with now Lazio boss Maurizio Sarri – in the past and believes making the move now could work out well.
He told La Gazzetta dello Sport: “I recommended him years ago, to [former president Silvio] Berlusconi. I told him to get Sarri and Dybala as emerging talents: they didn’t do anything.
“I believe Dybala would find himself more at home with Milan than with Inter: the Rossoneri are already used to playing with a deep-lying forward.
“But the Argentine would need to make himself available, get involved in winning the ball back and use his speed. Modern football is about movement.”
The Rossoneri underwent a takeover earlier in the summer but have yet to make any major moves in the transfer market.
This could change following the recent contract renewals of directors Paolo Maldini and Ricky Massara.
Forward Divock Origi has undergone a medical ahead of his free transfer from Liverpool.