Russell has been strongly linked with a move to the Silver Arrows for 2022, and it has been speculated that Bottas could effectively switch seats with him and return to Williams.
However, Watson believes that Hamilton would prefer having a “compliant” Bottas as his team-mate instead of Russell.
He also said that running a “young lion” like Russell alongside Hamilton could open the door to another team, even if Mercedes have the strongest car on the grid next year.
“My thoughts are that Lewis would like to keep Bottas, because he is what I would call a compliant team-mate,” Watson said in an interview with the English edition of RacingNews365.
“What he doesn’t want is [to be paired with] someone like George, who did a stunning job last year in Bahrain.
“Lewis is in a position of great authority and power within the Mercedes team, within the Mercedes family.
“There is a very good reason behind why Lewis was prepared to have Bottas.
“If you bring in a young lion like George, who I think is outstanding… I’ve seen over the years where you bring in two drivers who then end up fighting each other in the championship, you open the door to another team.
“I think that, at the end of the day, Mercedes will keep Bottas, simply because it’s a known commodity,” he added.
Bottas is currently fourth in the Drivers’ Standings on 108 points, while Hamilton sits at the summit of the table on 195 points.
Despite having a far from perfect first half of the season, Mercedes are leading the Constructors’ Championship after benefitting from Red Bull having two woeful races at Silverstone and the Hungaroring.