The Argentine attacker spent five years in the Spanish top-flight with Atletico, scoring 100 goals in 230 appearances for the capital club as they won the Europa League and UEFA Super Cup.
The striker moved to Manchester City in 2011 and has enjoyed a successful nine years in England.
Aguero has scored an impressive 254 goals in 370 appearances in all competitions, lifting four Premier League titles as well as the League Cup five times and the FA Cup on one occasion.
The 32-year-old has a year left on his contract with Pep Guardiola's team, though the club are reportedly set to offer him an extension.
Forlan, however, would rather see his former teammate return to Spain in the near future.
"It would be great to see Aguero again in LaLiga, he arrived in Spain very young but played good football," the former Uruguay star said.
"It would be spectacular for LaLiga."
Forlan and Aguero's former side are currently fourth in LaLiga, level on points with Sevilla and 14 points behind leaders Real Madrid with two matches left to play.
Diego Simeone's team are unbeaten in their last 15 matches in all competitions and will face RB Leipzig in the quarter-finals of the Champions League after eliminating title holders Liverpool in the last round.
And Forlan has been impressed by Atleti's current form since LaLiga returned from the three-month coronavirus-enforced suspension.
"Everybody demands Atletico get to the top of the table, but their return since the pandemic has been very good," he added. "And in August they will have the chance to play in the Champions League."
The 41-year-old also endorsed Barcelona's pursuit of Inter star Lautaro Martinez, as he believes the 22-year-old Argentina international could take over as the Camp Nou side's star forward.
"He would be a good option to replace Luis Suarez or Lionel Messi when the moment will come and he can start adapting to Barcelona," he said.