The Welsh talisman is currently without a club after ending his decorated nine-year association with Real Madrid.
With Wales preparing for this year's World Cup in Qatar, the 32-year-old is looking for a club where he can continue his career and ensure that he goes into the tournament in peak condition.
Bale's hometown club, the Bluebirds, are among the those seriously considering a move for Bale, but according to McCoist, the forward would be better served in the Premier League with a club like Newcastle.
Speaking on The Sports Breakfast, McCoist said: "I'm looking at it and clearly there's absolutely nothing wrong with wanting to go back and play for your hometown club.
"I think it's admirable, to say the least.
"However I still feel that he's got an awful lot to offer at the highest level, I really do.
"You watch him in the internationals and he'll be all geared up for the World Cup in Qatar and I just think that surely there are Premier League clubs out there.
"Automatically, I just think that Newcastle would be ideal."
McCoist isn't the first person to suggest Newcastle as an ideal destination for Bale either, with Wales legend Dean Saunders advocating the move too.
"If I could pick a club for him to go to now, I'd say sign for Newcastle," Saunders told talkSPORT.
"They've got a project; they're going in the right direction - he would slot in.
"The fans right now in Newcastle, because I've been there and I worked there - and I realise how much they love the club - right now they could sell 80,000 season tickets."