The 28-year-old midfielder - who has been linked with a move to Arsenal - has struggled to lock down a regular first team start at Madrid in recent seasons.
Rodriguez was loaned out to Bayern Munich the previous two campaigns and after returning to Madrid in the summer, has only managed 13 appearances in the Spanish capital during an injury-affected stint.
With the Colombian international's future seemingly away from the Santiago Bernabeu, his countryman Valderrama believes it's time for the playmaker to move on and that he can be a success anywhere.
"James is big enough to make his own decisions now," Valderrama, who won 111 caps for La Tricolour, told Caracol Radio.
"If it was me, I'd be running away from Madrid.
"He's good enough to play for any team. I wouldn't doubt for an instant.
"He's a great player, he's already proved it.
"He can start for any other team, he's got the quality to play anywhere in the world."
Valderrama has been vocal about Rodriguez needing to leave Real Madrid in the past, insisting that the former Monaco star wasn't wanted by Zinedine Zidane.
"The coach doesn’t want him and he won’t play if he stays in Real Madrid. He should leave, that’s just how it is," Valderrama said in August last year.
"When James signed for Madrid the fans were excited and so was the president, but the coach just doesn’t want him."
Rodriguez earned a move to Real in 2014 following his stunning performances in the 2014 World Cup, where he won the tournament's Golden Boot and was picked in the Team of the Tournament.
He was a success during his first campaign in the Spanish capital in 2014-15, winning selection in La Liga's team of the year as the competition's best midfielder and also being named in UEFA's team of the year.
However, he gradually fell out of favour at Los Blancos over the next two seasons and was eventually sent on a 24-month loan to Bayern.
Rodriguez won two Bundesliga titles with the Bavarian giants, but failed to convince the club to sign him permanently at the end of his temporary spell.