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Speculation surrounding the striker's future has dominated United's pre-season preparations since the Portuguese superstar handed in a shock transfer request last month.
After missing the pre-season tours of Thailand and Australia, Ronaldo played his first warm-up match on Sunday against Rayo Vallecano but was brought off at half-time after a tense touchline interaction with new manager Erik ten Hag.
Speaking on the latest episode of Sky Bet's The Overlap, former Manchester United captain Neville said Ronaldo should be allowed to leave the club before the transfer window closes.
"Ronaldo's achievements in football have gone beyond anything that anybody could have wished for and imagined," said Neville, who played alongside Ronaldo during the Portuguese's first spell at OId Trafford.
"He will go down as one of the top players of all time and always will be. What happens this summer at Manchester United will be forgotten about in 20 years.
The next 4 weeks are big for Manchester United and Cristiano .— Gary Neville (@GNev2) August 3, 2022
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"But it's unpalatable for me to watch as an ex-Manchester United captain, thinking that at this moment in time the star player in the dressing room is playing up.
"It has happened at times over the last few years, where you had [Paul] Pogba's agent – not necessarily Pogba – but his agent always playing up.
"You can't have your star player in a club running the shop. You cannot have it. So when Sir Alex Ferguson in the past moved players on, it's because that player needed to be moved on.
"I know Manchester United fans want Ronaldo to stay. But if Ronaldo wants to leave, Manchester United – in my mind – should facilitate that."
Neville also says he is concerned by United's transfer activity this summer and believes Ten Hag is not being given adequate support by the club.
The Red Devils have signed Tyrell Malacia from Feyenoord, Lisandro Martinez from Ajax and Christian Eriksen on a free transfer, but have so far failed to prise Ten Hag's No 1 target Frenkie de Jong away from Barcelona.
"I think he [Ten Hag] has had a really impressive start, a confident start, in spite of the fact that his star player is playing up and he's not being supported off the pitch by an operation that can't get him the players that he wants," added Neville.
"If you said to be two months ago that Manchester United would have Fred and [Scott] McTominay in midfield – and I like both of them, I think individually they give their all for Manchester United – and that we'd have [Anthony] Martial up front, who to be fair every Manchester United fan and coach had written off and thought he'd be leaving. He's now our centre forward for the season.
"I'd say that the manager has been given a tough hand."
Neville believes United's inability to secure De Jong's signature is becoming an embarrassment for the club.
"I said this about [Jadon] Sancho and it's the same now with De Jong, it gets to the point where that a signing that should be an excitement for the club… it drags on that long that you lose excitement for the signing," added Neville.
"It almost becomes a little bit of an embarrassment. It's still happening. I'm really concerned about the fact that they can't get signings over the line still."