The Derby County midfielder believes that Swansea City have a team spirit absent at Cardiff City that could see them edge out their local rivals for a place in the Premier League next season.
Speaking to BBC Sport, Savage said "I'd like nothing more than to see both teams in the Premier League – it's fantastic
"And add to that Wrexham doing great in the Conference and Welsh football is on the up," added 36-year-old Savage.
"With Gary Speed with the Welsh squad, it's a fantastic time for Welsh football."
"Cardiff has got a lot of high-profile strikers and it's going to be interesting to see which one of the two finishes higher and maybe get to the Premier League.
"If I was a betting man I'd put my money on Swansea because I think they are more of a team unit.
"But Cardiff are more equipped for the Premier League because of the individual players they've got – Craig Bellamy, Jay Boothroyd and Michael Chopra.
"Their manager [Dave Jones] has also managed in the Premier League but I still think Swansea have got the better chance"