The north London club were linked with the Real Madrid striker throughout the transfer window, only for the Frenchman to commit his future to the Spanish giants.
And Wright, who won the league and cup double with Arsenal in 1997-98, believes the club went about their business in the wrong manner.
"I thought the Benzema situation was embarrassing in the way they pursued it," he said on BT Sport.
"Trying to get a player like that, straight off the bat you have to find out if they're interested in coming. If they're interested, you pursue it.
The retired striker also stated that France international Benzema's decision to publically state he would not be leaving the Santiago Bernabeu left a sour taste.
"I thought [the way] they dealt with it was pretty bad, and the way he mugged Arsenal off on Twitter by saying Madrid is his home wasn't great," he added.
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