Cole spent last season on loan at Lille to help fill the void following Cabaye's move to Newcastle United, but has made just four appearances since heading back to Anfield.
The 30-year-old was replaced at half-time in the midweek Capital One Cup defeat by Swansea City and manager Brendan Rodgers subsequently implied Cole had not been value for money for Liverpool.
Galatasaray have been linked with a January loan bid for Cole, but Cabaye believes a move back to former French champions Lille could be a sensible option.
"It's difficult for him because he's not playing much," said Cabaye in the Daily Star Sunday.
"He did well for Lille and maybe it would be a good choice for him to go back there. If he wants more games, he can play more there.
"They like him at Lille, the club, the manager and the fans.
"I heard that the manager Rudi Garcia was keen to take him back. Joe did well, he fought for the team, so the people and the club liked him."
Cole appears unlikely to be involved for Liverpool against Newcastle on Sunday and Magpies boss Alan Pardew wonders why he has never truly fulfilled his potential.
Pardew said: "Joe's a great talent and, for whatever reason, something has gone missing.
"I remember at West Ham, we played Chelsea and I turned round in my dressing room and he was in the middle of it, chatting with everyone, as if he was going to play for me!
"This was before the game. I had to chase him out. He's an infectious guy and I hope he finds his feet.
"At the top of his form, you wouldn't want him playing against you."
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