Celtic this week rejected a second offer for the former Scunthorpe player and manager Neil Lennon revealed the latest figure was "nowhere near" £6million.
Hooper has shown his goalscoring exploits in the Champions League with crucial strikes against Spartak Moscow to help Celtic into the last 16 and McGarvey does not believe the Englishman should swap a double-header against Juventus for a potential relegation battle.
McGarvey said: "He is only 24, he is scoring goals in the Champions League and the Scottish Premier League. He can do no more than he is doing.
"He could be getting a call-up into the England squad soon because he is scoring goals in the Champions League, which is the top league in world football.
"For English clubs to offer £5million is an absolute joke."
McGarvey, who left St Mirren for Liverpool before joining Celtic, added: "I wouldn't go to Norwich. But, if you are getting double the wages you are getting at Celtic, it would be very difficult to say no.
"What person in the world would say no to double their wages if they went to England?
"It's very difficult for Celtic to compete with the English Premier League because they have so much money, but Celtic have a bit of Champions League money and have held on to their players well in the last couple of years and have made more than £20million from the Champions League because of that. I think Celtic will try to hold on to him.
"If he scores against Juventus and helps Celtic into the last eight, that would make Celtic another five or six million. You have to look at the agent, he will be egging him on to go because that makes him money. He will be getting pressured from both sides.
"If Manchester United came in and offered £15million then I would think about that but if he stays at Celtic he will be in the Champions League every year and pit his wits against the best players in the world."
McGarvey believes Hooper, who has scored 22 goals this season, could play for one of the top teams in the Barclays Premier League and used the example of Ki Sung-yueng, who left Celtic Park for Swansea in a £6million deal last summer.
"Ki went down to Swansea and is playing out his skin, and Hooper is a much better player than Ki," McGarvey said.
"You have got to remember Chelsea and Man City couldn't get in the last 16 so the Champions League is a higher quality than the English Premier League.
"So if he can do it in the Champions League he can do it in the English Premier League."
McGarvey was at Hampden today promoting Celtic's Scottish Communities League Cup semi-final against St Mirren, which takes place at the national stadium on Sunday.
McGarvey won Scottish Cup winners' medals with both teams but does not believe there is any chance of the Paisley side causing an upset.
"The only thing that can beat Celtic is being overconfident in the game and I don't think Neil Lennon will let that happen," he said. "I can't see Celtic getting beat."