The 28-year-old was struggling from an injury problem prior to the international break, coinciding with the Gunners' upturn in fortunes as they climbed up the Premier League table.
Arsenal beat Brighton & Hove Albion 2-0 in their last outing and Merson believes that boss Arsene Wenger should stick with a winning formula, rather than turning to fit-again Ozil for the weekend trip to Vicarage Road.
"I wouldn't put Mesut Ozil back into the side," he told Sky Sports News. "He doesn't work hard enough for the team. He is a top player but the least you can do is work hard.
"If you have got talent you have had a result - and he has talent - but I have seen players with much less talent than him have a bigger impact on games, which can't be right."
Ozil, who is still in discussions over a new deal, has started four of Arsenal's seven Premier League games so far this season.