The Wales striker says Giggs' status as a Welsh legend coupled with his success as a player outweigh any fears of handing him the reigns without any managerial experience.
The Football Association of Wales is yet to name a replacement for John Toshak who stepped down from his post last month following a six-year reign.
Former Under 21s boss Brian Flynn has been put in temporary charge and has also thrown his hat into the ring for the permanent position, but Earnshaw believes Giggs is also a viable option.
"I think he would be good," he told Soccer AM. "When John Toshak left everyone thought Ryan Giggs because he's the biggest legend to come out of Wales and he's probably the best player to ever come out of Wales, so everyone looks to him.
"He's got a few medals to back it up too. I know him from obviously playing with him and I think all of his experience and who he is would take over if he did (get the job)."
Flynn though remains favourite with the bookies despite losing his first game in charge on Friday night.
Wales suffered a narrow 1-0 defeat to Bulgaria leaving their hopes of qualifying for Euro 2012 in tatters; however Earnshaw - who missed the game with a thigh strain - believes there were positives to take out of the game.
He said: "I thought the boys put in a lot of effort, I just think we weren't deadly enough in front of goal. We had a few chances and we played well.
"I thought it was a little bit quicker tempo, we looked sharper and we played a little bit more direct as well, which maybe suited us, especially in that game and it's refreshing I think."
Wales must now travel to Switzerland for a crunch game on Tuesday, and the Nottingham Forest hitman believes the FAW will judge Flynn's performance on both qualifiers.
"It's really how we go about it on Tuesday," he said. "(He will be judged) on both games rather than just last night, but overall I think we can take some positives out of it because we played quite well and created some chances."