Williams is expected to join the European champions from Scarlets at the end of the season, though the move has not been confirmed.
Charteris has played for Perpignan, Racing 92 and Bath in four and a half seasons outside Wales.
"I've spoken to Sanj [Williams] about it and for him I think it would be a great move," said Charteris.
"He would be playing in an unbelievable team, playing in a great league in the Premiership and he will flourish as a player and go from strength to strength."
Williams and Charteris line up for Wales against South Africa in Cardiff on Saturday in the final match of Wales' autumn series.
Scarlets and the Welsh Rugby Union are keen to keep the player in Wales.
A move to England would mean Williams - who plays full-back for his region - would be subject to rules which limit the number of players based outside Wales who can be picked for the national side.
The senior player selection policy - known as the so-called "Gatland's law" - means only three wildcard players can be in the Wales squad for any series of matches.
This autumn Jamie Roberts (Harlequins), George North (Northampton) and Taulupe Faletau (Bath) were the selections with Bath fly-half Rhys Priestland missing out.
Charteris is exempt because he was not offered a contract by a Welsh region before joining Bath, but still believes Saracens would be a good move for Williams.
"I understand the argument from Wales why they want to keep players here but from a purely selfish point of view - or from a player's point of view - I think it's undoubtedly the right move and the best thing for him to do," added Charteris.
"And I think Wales as a national team will benefit from that because he will come back with more experience. He will learn things from Saracens, little things that he can bring back.
"I certainly do understand the argument of having the best players in Wales in terms of selling it to the public.
"But I think the fact we only have four teams means we have to have some boys playing away to open up spots for other players."
Charteris left Newport Gwent Dragons for Perpignan in 2012 and says the move had been a big success for him.
"It's a hard one - it's all about the individual," he added.
"For me it was the best thing I ever did was move outside of Wales.
"From a personal point of view, for my private life, for my family, for all of that it was brilliant.
"I've loved it. And from a rugby point of view I think I've developed as a player from being out.
Media playback is not supported on this device
"There are certain boys who have moved - whether to France or England - and it hasn't worked for them for whatever reason and they feel happier being back home whether that's for the fans support around them or familiarity or whatever."
Charteris was a lean 21-year-old when he made his Wales debut against a South African team boasting legendary locks Bakkies Botha and Victor Matfield in 2004.
The Springboks will be missing another world-class second row in Cardiff with Eben Etzebeth back home after suffering concussion in the defeat by England.
But Charteris does not believe his absence will affect the Springboks.
"In all honesty the strongest second row this series has been Pieter-Steph du Toit," he said.
"He's been quality. When you see him playing for the national side he's been outstanding and I know he's been going very well for the Stormers as well so I think he's their focal point, their strongest second row.
"Obviously Lood de Jager is a big player, a very good player for them as well.
"There's a continual conveyor belt of second rows and back rows coming out of South Africa and the next one is always bigger, stronger and faster than the last one."
Wales wing Liam Williams would benefit if he decides to join Saracens, says lock Luke Charteris.