For the first time since 2014, Mercedes have gone three races without
victory and Hamilton has now drifted to joint-favourite with Ferrari's
Sebastian Vettel to win the World Championship.
And Villeneuve thinks Hamilton's form has become "very troubling" and needs to "wake up".
"Hamilton is in crisis and is losing points for the championship," Villeneuve told Sky Italia.
"But I think all of Mercedes is in crisis. Now they must bet on Bottas, who is not a championship driver.
"After the impressive qualifying in Melbourne, Lewis is no longer able to drive the car. It's very troubling," he said.
"We saw last year that when he's in crisis he loses a lot, falls
behind in the races and falls asleep, is not aggressive. We'll have to
see when and if he wakes up."