The Switzerland international’s deficiencies were laid bare in the Gunners’ last two league defeats to Wolves and bitter rivals Tottenham.
Xhaka has faced plenty of criticism over his Arsenal career but has been a constant feature for the north Londoners under Arsene Wenger, Unai Emery and now Arteta.
Meanwhile, the club rejected a £15million offer from Wolves for Maitland-Niles back in the summer, but the versatile 23-year-old has barely featured in the Premier League this season.
Maitland-Niles excelled in his preferred central midfield position in last week’s 4-1 victory over Rapid Vienna in the Europa League, prompting calls for him to start in the north London derby.
However, Arteta opted to field Xhaka, who was one of the players at fault for Spurs’ second goal as the Gunners slipped to a 2-0 defeat at the Tottenham Hotspur Stadium.
And Dixon can’t see what benefits there are to playing the 28-year-old ahead of Maitland-Niles in the middle of the park.
The Gunners legend told the Handbrake Off podcast: ‘It is worrying when he doesn’t spot certain things that we all spot that you go, ‘Why isn’t Maitland-Niles playing instead of Xhaka?’
‘Xhaka for me doesn’t do anything that Maitland-Niles can’t do so I can’t fathom that one,’ he added.
Dixon puts their languid and disjointed performances down to the lack of cohesive movement when transitioning from defence to attack.
‘I think the problem is the disconnect between the lines,’ the former England international continued.
‘The difference between the different sections of the team it’s almost like the back four all train on their own. We used to go off and do our own stuff but ultimately there was an understanding of what each department is doing.
‘At the moment the midfield, forwards and defence don’t seem to be getting any crossover in information.
‘Ultimately it all boils down to that midfield area.
‘And if you’ve got a new player who’s not fit against Tottenham [Thomas Partey] and a player who doesn’t necessarily understand the game at all from my point of view in Xhaka then that is a big chunk of the team.’