Wallace has been linked with a seven-figure move away from the League Two champions during the transfer window, with the latest round of financial problems to hit the club raising fears among fans that the Scotland defender could exit to solve a cash crisis.
The left-back has committed himself to the cause as McCoist bids to guide his side back to where they feel they belong, and Papac hopes his former manager is allowed to retain his most valuable stars.
He said: "Lee is a very important player for the team at the moment and it would be a major problem if he left the club.
"Each player had to make the best personal choice for their future in 2012. For the club, it was great news when he decided to stay.
"Ally is trying to create a team for the top flight eventually and players of this quality leaving now will complicate his job."
Concerns have risen among the Light Blue legions that Gers' progression could be hindered if McCoist's player budget is slashed.
The Ibrox stars have rejected a proposal from chief executive Graham Wallace that would have seen them take a 15% pay cut as he conducts a wide-ranging review of costs across the club.
Papac was part of the squad that took a reduction in wages during administration two years ago and insists the players should not feel the brunt of money-saving measures once again.
He said: "The problems are always trying to be solved through the players but the cause of these is not on the field. The problems are in the offices of Ibrox and they need to seek solutions."
While McCoist has guided his side into a commanding position in the League One title race, all is not well at Ibrox once again in the midst of Wallace's cost-cutting drive.
The Gers boss still finds himself battling off-field problems and Papac reckons support from the stands will be crucial to keep the club on the right track.
He said: "From the start Ally has had lots of problems and now in this moment the only thing which he needs is fans' support.
"Rangers fans through the history made the club what it is, the club with the most trophies and one of the greatest clubs in the world.
"And I'm sure fans will support the club in the future with the same passion no matter what."