James burst onto the scene at Old Trafford in his natural position as a left winger but was soon shifted over to the right as Ole Gunnar Solskjaer looked to add balance to his attacking set-up.
The 22-year-old has never quite been able to recapture the impressive form which followed his arrival from Swansea last year, but Wales manager Giggs insists he is capable of an improvement in his game.
James has sporadically been used as a central attacking option for the Welsh national team and United legend Giggs believes it is a switch which Solskjaer should experiment with too.
“In my last game [for Wales] he played more centrally,” Giggs told fan channel Webby and O’Neill. “In the game against Ireland he played on the wing, and against Bulgaria away he played more as an inside forward.
“He can do it. The good thing about that is instead of coming up against full-backs he’s more or less coming up against centre-halves. Centre-halves don’t want to be against him, centre-halves don’t want to be going out to those wide areas and facing Dan James.”
James has proven to be a perpetual threat with his electric pace up front but Giggs admits there is still room for improvement with his decision making.
He added: “The next thing for Dan is when he gets in those positions is that final decision making and execution. Once he does that… because he gets in so many good positions because of his pace.”