The former Reds midfielder was sacked by Real Madrid earlier this year in his first season in charge.
Despite Xabi's demise, Owen says he regards the former Bayer Leverkusen Bundesliga-winning coach highly and admits he wouldn't be surprised seeing him eventually move to Anfield.
Xabi had the chance to take the Liverpool job ahead of Arne Slot two years ago, but Owen doesn't believe the Spaniard now regrets his decision to turn them down.
He told Tribalfootball.com: "I've seen some managers leave and it's been disastrous, but I wouldn't say it was a disaster, Xabi Alonso at Real Madrid.
"I think Xabi is going to continue to have an amazing career. You know, Liverpool might be a destination in the future for him.
"Who knows? I mean, he's certainly got the links. He talks perfect English. He's got an affinity with the club, so I wouldn't say that he's sort of missed his chance, let's say. That, that could come back in, you know, in years to come."
Indeed, Owen insists Xabi's short spell with Real Madrid shouldn't work against him in the future.
He continued: "There's some great managers at Real Madrid and it's not worked perfectly. Real Madrid is not as easy a club to manage as people might think and you might have to be a certain type of person, certain type of coach to do it.
"But I would certainly not look at his time involved and say it was disastrous. Yeah, it could have been better, but Real Madrid have got incredibly high standards. That's the bottom line.
"And Real Madrid have won the league in the past and sacked their managers just because they didn't win the Champions League..."
Michael Owen was speaking to Tribalfootball on behalf of casino.org , where he is now the UK ambassador for the online casino comparison site