Ward said that Arthur has a "great voice", but claimed that the 24-year-old from Teesside must "listen and learn" if he wants to succeed.
Watch our interview with Shayne Ward about James Arthur and more below:
"My advice to him... Just learn as much as you can from the get go," said Ward.
"It's easy to have the wrong type of people around you."
Ward was dropped by Syco after his third album Obsession didn't make the Top 10 and he struggled to reach previous sales highs.
Arthur had a Twitter spat with another X Factor winner, Matt Cardle, at the end of 2012. The pair fell out over comments Arthur made about previous male winners of the show.
When Cardle warned the 24-year-old about being too cocky, Arthur went on to call Cardle's "desperation for press" embarrassing.
Ward is one of the contestants on this year's Dancing on Ice, which launches on Sunday (January 6).
Photo gallery - Dancing on Ice 2013 launch photo call: