Walcott was left out of England's Euro 2016 squad by then-head coach Roy Hodgson after a disappointing EPL season.
Hodgson resigned after England exited at the Round of 16 stage.
He has spent most of his career as a winger, though he has been employed as a striker by Wenger, with varying degrees of success.
His performance as a striker in the 2-3 defeat at Manchester United in February in an EPL match was widely criticised.
But the coach said that Walcott's predatory instincts meant his future lies up front.
"I believe that he has all the ingredients to be a great striker, because of the quality of his runs. He is an intelligent player, a good finisher. He is not a great defender so I believe that to use his runs in the final third for us could be very efficient," Wenger was quoted as saying by Sky Sports on Sunday.
"After that, I think scoring goals playing there, giving him confidence to play there, will slowly convince him maybe that he can be absolutely fantastic there."
"On the flank, today there is much defensive work asked from the players that you lose a lot of his qualities when you put him there. For me in my head I will use him more up front," he added.
Wenger revealed Walcott was hopeful he would go to France with England for Euro 2016 and said that his poor performance against Manchester may have been the final straw for Hodgson.
"It was a big shock for Theo not to go to the Euros. Maybe he Hodgson felt in some games he didn't do well... especially in one game there was a question for him and that was the game at Man United where everyone questioned him in this position," the Frenchman said.
"I think on the day he didn't perform well, it was not only Theo Walcott who didn't have a great game, it was everybody. From then on, people became sceptical," Wenger reasoned.
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