Manuel Pellegrini's appointment will only be successful if West Ham back it up with investment in their playing squad, according to Tony Gale.
The Hammers announced Pellegrini's return to the Premier League on Tuesday morning after the Chilean signed a three-year contract.
Pellegrini will become the highest-paid manager in the club's history. It is understood he will receive around £7m a year, although he will be taking a significant pay cut having earned around £16m a year in China.
"I'll only be happy when West Ham release the funds to buy players because I think managers are only as good as the players that they're dealing with," Gale said.
"I just hope this isn't a smokescreen by the West Ham board to sign a 'profile manager', so that they don't have to buy players.
"Okay, he's going to become the highest paid West Ham manager in history but there's lots of money in the West Ham coffers and they need to spend it as well."
Pellegrini, who won the Premier League with Manchester City in 2013-14, has spent the past two years with Hebei China Fortune.
He inherits a side which finished a turbulent Premier League campaign 13th, having flirted with relegation up until the final weeks of the season.
Slaven Bilic was dismissed in November with the Hammers in the bottom three, before David Moyes was brought in to steady the ship.
Moyes achieved his target of steering the east London club to safety, but the way he did it was not deemed enough for the West Ham board to offer him an extension.
Marko Arnautovic and Manuel Lanzini carried much of the attacking load under Moyes and Gale is adamant his former club must hang on to their star performers, as well as adding new faces.
"What they've got to do is not sell their best players," Gale said.
"The likes of Lanzini and Arnautovic to maybe fund the surgery of the team. They need to add to those good players. Hopefully, the signing of Pellegrini will make sure that those players stay there."