The former City player of the year yesterday signed for the ambitious Skrill Premier club until the end of the season, with the option of a further 12 months after that.
But Parkinson would not be surprised to see the giant centre half back before too long.
He said: “Everyone wants to play at the highest level and Olly is no different.
“I had several chats with Olly and quite a few League Two clubs wanted to take him. But we both felt if he can go to Forest Green and play from now to the end of the season at least, he will get back to where he was.
“It’s important that he does the best for himself going forward. I don’t think there’s any stigma in dropping down.
“They are a big club in that division but Olly is a league player.
“People know he has played a lot of league football but not very much since last October (2012). From the outside, they will look at it and see that he’s gone there purely to play football again.”
Forest Green were tipped to challenge for promotion this season after investing heavily but currently sit eight points off the play-offs in mid-table.
Oliver cancelled his City contract last week after nearly four years at Valley Parade. Having swept the player awards in 2012, he missed most of last season after snapping his Achilles.
Parkinson added: “Olly was a great servant for the club and in some tough times as well.
“He was very unlucky because he snapped his Achilles against Burton and also had a hip operation around the same time.
“The Achilles is fine now and the hip is not giving him any problems. I really wish him the best.
“He’s a terrific character who just needs to play games of football again. I’m sure there will be other league clubs wanting him in the summer.
“Olly is still young and I think he will get back in no problem.”
James Hanson had an injection in his hamstring yesterday and should be back in training later in the week.
Andrew Davies reported no problems on his return after missing the Molineux defeat.