Both Premier League clubs are in talks to land the Ukrainian winger from Shakhtar Donetsk, with a price tag of £85m placed on his services.
At present, Arsenal are enjoying a much better 2022/23 campaign than the Blues.
Arsenal are five points clear atop of the Premier League and into the next round of the FA Cup.
Chelsea, meanwhile, are sat in midtable and were knocked out of the FA Cup in the 3rd round last week.
Despite this, Collymore believes Chelsea would be a better move for Mudryk than Arsenal.
He told CaughtOffside: “I know some fans will argue that considering where both clubs are at the minute, if he were to choose the Blues over the Gunners, it’ll only be for the money.
“And that may well be true, but for me, Chelsea is still the more attractive project. If [Todd] Boehly can sell Chelsea’s future to Mudryk then that’s the more alluring option.
“If I had the choice, I’d choose Chelsea over Arsenal and that’s not me dismissing the good work Mikel Arteta and Arsenal are doing, but I just think over a three or four-year period, the Blues are the better project and the club more likely to consistently compete for silverware.
“So all that being considered, I wouldn’t be surprised if Mudryk ended up at Stamford Bridge.”