Welker saw his role diminish with the Denver Broncos in 2014 after he suffered a concussion in the preseason -- his third in roughly a nine-month span after two in 2013.
"I don't want Wes to play for my own personal reasons. I've seen him get concussions. It scares me," Bailey told Fox Sports. "I think he can still play, but I don't want him to play because of these concussions.
"This thing is no joke. It's a serious thing when you start talking about your head. And for him to have to worry about that at a young age that he is now, he has to think about that for years to come, and I just hope he hangs it up and not strap it up again."
The 34-year-old Welker spent the past two seasons with the Broncos and last year had 49 catches for 464 yards and two touchdowns in 14 games. In 10 NFL seasons with the Miami Dolphins, New England Patriots and Broncos, he has 890 receptions for 9,822 yards and 50 touchdowns.
Welker is still a free agent as NFL training camps are getting ready to open.
"I understand why he has that desire to play, he wants the ring," said Bailey, who retired last October after 15 NFL seasons. "He still has that hunger, I just don't want to see it."
Welker said recently that he has been cleared to continue his NFL career by one of the country's leading concussion experts, Dr. Stanley Herring of Seattle.
"I knew there were concerns out there but on top of that I wanted to know for my own peace of mind," Welker said. "If there was something wrong, I wanted to know. ... For me, everything came out all good."