Ricciardo is leaving McLaren a year early by mutual agreement and told reporters at the Italian Grand Prix that he was keeping all options open, for next year and beyond.
Sitting alongside the eight-times grand prix winner in a scheduled news conference at Monza, seven-times world champion Hamilton said he wanted to see Ricciardo continue on the starting grid.
"I think he should be racing, personally. He is far too talented (to be a reserve). He has earned the right to be amongst us all racing," said Hamilton, who made clear he had no plans to retire and open a seat.
"Of course if he’s a part of our team, then great. But that role is not anywhere near what’s best for him.
"If I was managing him, he’d be racing."
Ricciardo won at Monza last year but has generally struggled since he joined McLaren, out-performed by team mate Lando Norris.
The team have announced 21-year-old Australian Oscar Piastri, currently a reserve for both Renault-owned Alpine and McLaren, as his replacement.
"I still don't know what next year looks like," said Ricciardo. "I do want to be on the grid, I do want to race."
The Australian said earlier in the week that he wanted to hear everything.
"Even if it's reserve, I don't want to be too proud to say, 'I'm too good for that'. I just want to hear everything and see what makes sense," he told Australia's The Core website.
