The 27-year-old's current deal does not expire until 2022, but talks have begun over an extension and Barcelona are thought to view those negotiations as their number one priority in the coming months.
However, Ter Stegen's future has come under increasing scrutiny amid reports that Bayern Munich are lining up a world-record deal for the shot-stopper, and Rivaldo believes that the Spanish champions need to do whatever it takes to keep him at the club.
"Barcelona are negotiating a contract renewal with the goalkeeper Ter Stegen, and I agree that he deserves an improved salary for all he has been doing for the club in the last few years," Rivaldo told Betfair.
"Of course, much will depend on the player's demands as I don't believe either that he should earn a similar salary to [Luis] Suarez or [Lionel] Messi, but he should become one of the better paid members of the squad.
"He transmits safety and a team is built from the back. He knows how to play with his feet, has already saved the team many times and he's clearly deserving of a better income."
Ter Stegen, who has also been linked with Chelsea, joined Barcelona in 2014 and has made 224 appearances for the club across all competitions.