Zaha's future has been the subject of much discussion this summer after Palace manager Roy Hodgson admitted the winger was unsettled at the club, with Everton and Arsenal having shown strong interest in the Ivorian's services in the past.
However, his current contract at Selhurst Park doesn't expire until 2023, making the prospect of another club signing the forward on a cut-price deal seem unlikely.
With Zaha's future at a difficult crossroads, Townsend spoke to talkSPORT of his belief that his colleague is more than capable of playing at the highest possible level should he leave south London.
“Wilfried Zaha could play for the very best in the world. He’s the most talented player I’ve ever played with and he should be playing in the Champions League," said the former Spurs man, who trained with the likes of Harry Kane, Christian Eriksen and Mousa Dembele while at White Hart Lane.
“I’m very grateful that we have him at Palace. Everyone at the club is grateful, and if we have him beyond this window we’d be even more grateful!"
Townsend stressed that, even if a move for the wantaway winger failed to materialise, Zaha would not let his professional standards slip at the club where he got his first professional start.
“If that’s [Zaha staying another season at Palace] the case I’m sure he’ll knuckle down and have another great season," Townsend added.
"He deserves to be playing at the highest level. But as long as he's a Palace player, and I'm hopeful it does continue beyond this window, we're grateful and delighted to have him."