The Preston North End and England legend Sir Tom received his own knighthood in the New Year's Honours list in 1998 and believes Ferguson has more than matched the requirements to receive the highest honour.
"Alex couldn't have done much more than he already has," Sir Tom said.
"I think he will get a knighthood if he wins the Champions' Cup this year or the Double.
"But I think the European Cup is uppermost in his mind. I don't think there is a greater achievement than that. He has done a fantastic job at United.
"And it has been so important that he has brought so many youngsters through and kept the English flag flying."
But Sir Tom added that there was one notable name that had been missed off the honours list for knighthoods.
"Bob Paisley was unfortunate not to receive one because he had a fantastic career at Liverpool," Sir Tom said.
"It was a great achievement but you don't think about these things until you get them.
"It is a great honour and there are few of them in the football world. It is a one-off and you don't get many knighthoods in a lifetime!"
Ferguson could become the latest in a select band of football manager knights - if he receives the fans' backing.
Ferguson has enjoyed unprecedented success at Old Trafford and is hoping to guide the club to a unique Treble: the European Cup, the Premiership title and the FA Cup.
A successful finale to the season could enable the Scot to take his place alongside other knights such as Sir Matt Busby and Sir Alf Ramsey.
According to Downing Street, Ferguson has a reasonable chance of receiving the award.
Victory in the European Cup final next month would certainly move Ferguson nearer a personal treble, as he was awarded the OBE in 1985 and the CBE 10 years later.
"If Manchester United supporters wanted to vote en masse, they could do," a Number 10 spokesman said.
"The person needs to be nominated and anyone can nominate anyone.
"The honours system is open for absolutely anybody to nominate anyone for any honour they want to nominate them for.
"All they have to do is contact the Nominations Union for a form and the form is duly filled in by the person who wishes to nominate. It is quite straightforward.
"There are lots of people who are nominated and Mr Ferguson would have to be considered among the other nominations.
"We get thousands of nominations for the Queen's Birthday Honours and the New Year Honours."
All applications are judged by an honours panel whose composition is kept secret.Reuse content