Deco believes John Terry can still play at a high enough level to remain at Chelsea for another year.
Terry's contract is set to expire imminently, but, after a long period of uncertainty, he is considering a one-year extension from the club, although he has revealed it would see him assume a "different role".
The 35-year-old centre-back reiterated his desire to remain at Stamford Bridge when he addressed supporters following Sunday's 1-1 draw with Leicester City, but an agreement is yet to be reached.
Deco was a Premier League and FA Cup double winner alongside Terry at Chelsea in 2010 and feels his former team-mate can still perform as required.
"Terry is a fantastic captain," Deco told Omnisport.
"He's a legend of the club, he's a reference for the players and of course he deserves one year more. I think he can still play at a high level.
"But like I said he's a legend, he's important for the club and for the young players too, and of course I think he's good to stay one more year."