The 22-year-old has been heavily linked with a move to Old Trafford, with one report claiming that the Red Devils are determined to sign the Hammers star next summer.
"City already have the strongest group of players in the history of English football, but still collect the best players they can.
"Yes, they have Rodri, but Fernandinho's 36 and in the final six months of his contract, so Rice is an obvious replacement because they have the finances and are buying when they are on top.
"City, Chelsea and United will all pay a premium for Rice. The only argument you can offer if you're buying is that he's not a striker and that's where the big money generally goes. It might take Rice to another level."
Souness added that he does not believe his former club Liverpool will enter the race for Rice, with City, United and Chelsea set to battle for the England international, who is valued at around £100m by the Hammers.
"I reckon Rice is going to be an in-demand footballer with the bigger clubs. Whether it's Manchester United, Chelsea or Manchester City. I don't think Liverpool will be in the chase for him, but the other three will."
Rice, who sees his contract at the London Stadium expire in June 2024, has made 169 appearances across all competitions for West Ham, as well as representing England at international level on 27 occasions. body check tags ::