Lewis Hamilton won the drivers' championship in 2014, with Nico Rosberg completing a Mercedes quinella - the garage dominating the team competition, finishing some 296 points clear of Red Bull (405 points).
Williams (320 points) were third, with Valtteri Bottas finishing fourth in the drivers' standings, while team-mate Felipe Massa was seventh.
"Williams is not up to Mercedes level and they do not have the drivers that Mercedes have," said Villeneuve, who won an F1 championship with Williams in 1997.
"Felipe can fight for the title but Mercedes have got two drivers who do not waste time."
Villeneuve also commented on Fernando Alonso's defection to McLaren after Sebastian Vettel shifted to Ferrari, claiming the Spaniard needed to get improvement out of the car or face a long season.
"If Alonso will see improvements in the car it is going to be a good [year], if it does not happen it is going to be bad news," he said.
"Especially if [team-mate Jenson] Button will be faster than him things are not going to be easy in McLaren.
"However, Alonso is a driver who gives always his best with the car."
Villeneuve, however, said McLaren's car was not capable of winning the title.
"McLaren have a good drivers and a good mentality but that's it," the Canadian said.
"They do not have the right car yet and they have not understood what was wrong last year.
"Let's see what Honda will be able to do with their engines."
Another former F1 driver, Robert Kubica also said McLaren's potential to improve was in Honda's hands but added Alonso's decision to move there was an indication of their promise.
"Honestly I think some people can foresee the future if they say that McLaren will take a couple of years to be back on winning," the Pole, who drives in the World Rally Championship, said.
"Formula 1 is a very complex sport, it is difficult to say how long McLaren is going to take to be on top again with Honda's engines.
"People that talk about two or three years they say that for the sake of doing it.
"As I said F1 is much more complex and competitive that what people can see from outside.
"If Fernando [Alonso] decided to go to McLaren, it means that he was guaranteed that he had some chances to win the title."