The talented 20-year-old finished fourth in the voting in 2018 after winning the World Cup with France.
"I think Sadio Mane had a better year than Kylian Mbappe," Diouf told Le Parisien. "He deserves the Ballon d'Or more from a personal and collective point of view.
"We cannot compare Ligue 1 and the Premier League. For me, it would be Messi, [Virgil] van Dijk and Mane, because of the league where they evolve.
"You know that to win the Ballon d'Or, you have to leave France.
"The only player who managed to win it by being in Ligue 1 is Jean-Pierre Papin. And he played in a Marseille team that reached the final of the Champions League [the 1990-91 European Cup].
"You can lose the final and win the Ballon d'Or, but you cannot if you are eliminated in the round of 16."
George Weah spent half of 1995 at PSG before switching to Serie A giants AC Milan and winning European football's top individual prize.
Diouf thinks the scorer of this week's sublime Champions League hat-trick against Club Brugge can claim the Ballon d'Or several times over if he makes a similar move to a leading club in an elite league.
In May, Mbappe hinted he could be ready for a new challenge, fuelling links to Real Madrid.
"He can win the Ballon d'Or at least five times, because he is so young and has talent," Diouf said. "But he has to go to an institution."