Villa resume their Championship campaign when they head to QPR on Saturday, aiming to bounce back from a 2-1 home defeat to Sheffield Wednesday last time out.
Merson, who remains a firm favourite among supporters at Villa Park, admits a top six finish is the minimum requirement but expects his former club to achieve their goal.
“You talk about big clubs, in the Championship they are the biggest. By far they are the biggest,” he told the Express & Star..
“For me they need to get into the play-offs at least and I think they will.
“I know they had a hiccup against Sheffield Wednesday. But that is what the Championship is all about, it’s relentless.
“You just have to make sure you bounce back the week after. And Villa have got the capability to go out and win five games on the trot.”
Villa currently sit sixth in the table following a run of six wins in nine games, which saw them climb from the bottom half and eased the pressure on Bruce, who has not always enjoyed the smoothest of rides during his 13 months in charge.
Merson, who scored 19 goals in 145 appearances for Villa between 1998 and 2002, said: “Steve is the man to get them up, there is no doubt about that. He has been in the Championship enough times.
“You look at his CV. He got Birmingham promoted twice. He got Hull City promoted twice. For me he is right man, 100 per cent.”
Villa technical director Steve Round has meanwhile been linked with a move to Arsenal.
The 47-year-old, who has been credited with revamping Villa’s scouting network since joining the club in September last year, is reported to be on the shortlist to be the Gunners new sporting director.