"It would be a real shame if they didn't consider the Welsh captain, who won a Grand Slam just a year ago, for a Lions tour," Holley told the Western Mail.
"Ryan is having to bear the brunt of the captaincy of his club and his nation at the moment. It's a huge burden and he's still very young in his captaincy.
"But I think he has shown enough over the past two years in his play and his leadership to suggest he does bounce back well."
Holley, who presided over a crushing Heineken Cup defeat to Munster last weekend, believes Jones has what it takes to recapture his best form on the 10-match tour of the Republic which begins late next month.
While he admits that Jones' form has not been perfect so far this season, Holley is confident that the 28-year-old is still the kind of player that Ian McGeechan would want in his squad when the chips are down.
"Australia was a big match that he played well in and against Leicester for us at the Liberty Stadium he showed what Ryan Jones can really do.
"If he's honest, he would probably agree he hasn't hit some of the form he showed when he first came to the Ospreys. But there have been some extra burdens on him as well as extra competition.
"He produces a work-rate and a level of performance that warrants him being the captain of his nation.
"I would take him as a leader, as a versatile back-row player, a good lineout forward. He is someone who is quite physical and works extremely hard - those are the sort of things that would go down well in South Africa.
"I think Ryan has some 'bouncebackability' in him. He's proven it in the past and we'll see it again in the future."