"The two players they've bought, Townsend and Shelvey, I like them but if you look at it, they weren't essential buys," said Lee, who made 303 league appearances for the club between 1992 and 2002.
"It's like going to get your groceries and you see something and think, 'I wouldn't mind that'.
"But we need a goalscorer, we need a leader at the back, a centre half and a left-back.
"We've got Rolando Aarons playing there at the moment. He's just a young kid and that's not his position. For a club the size of Newcastle, that's ridiculous really."
Lee believes they will avoid relegation but fears it could be a close run thing.
He said: "I don't see much of them live these days but I wouldn't want to actually. Chelsea was a poor result and a poor performance.
"That's the trouble with Newcastle. You think they've turned the corner but people forget their previous win was against West Brom who were awful and it was only 1-0.
"They've got a lot of problems but I'm not really worried. I think there are three worse teams than Newcastle."
CHELSEA 5 NEWCASTLE UTD 1
21. Rob Elliot
22. Daryl Janmaat
27. Steven Taylor
2. Fabricio Coloccini
16. Rolando Aarons
12. Jonjo Shelvey
24. Cheick Tiote 67'
7. Moussa Sissoko
5. Georginio Wijnaldum 45'
25. Andros Townsend
45. Aleksandar Mitrovic 70'
4. Jack Colback 45'
15. Jamaal Lascelles 67'
17. Ayoze Perez
23. Henri Saivet
26. Karl Darlow
28. Seydou Doumbia 70'
29. Emmanuel Riviere
Chelsea tore through Newcastle to send the Magpies spiralling into the Premier League relegation zone, and McClaren sat in the rain looking like a man who needed a brolly.
Diego Costa struck his eighth goal in 10 games, Pedro scored twice and Willian and Bertrand Traore were also on target in a 5-1 win. Andros Townsend scored a late consolation for the Magpies.
Chelsea's only major concern came when John Terry was withdrawn before half-time with an apparent hamstring injury.
The Blues were 3-0 up inside 17 minutes and looked like champions, but that was mainly down to Newcastle's calamitous defending as Steve McClaren's men lost for the sixth straight away game to fall below Sunderland on goal difference.
The Magpies have more than two weeks to dwell on the defeat. They next play at Stoke on March 2.
Chelsea's most recent home win in the Premier League was the 3-1 defeat of Sunderland on December 19, two days after Jose Mourinho's sacking.
That was the start of the current 12-game unbeaten run, with 11 of those under interim boss Guus Hiddink.
The Premier League champions climbed to 12th with Hiddink's third Premier League win and first at home and, despite the emphatic result, their best chance of Champions League football remains by winning the European Cup.
Paris St Germain stand in the way in Tuesday's last-16 first leg, with Terry's participation possibly in doubt.
Costa showed no ill effects after breaking his nose in training on Thursday.
Hiddink joked Chelsea had a "Zorro team" after Costa joined Cesar Azpilicueta in requiring a face mask. Nemanja Matic and Gary Cahill have also worn the protection of late.
Zorro is also Spanish for fox and Costa pounced in the box after Willian burst down the right channel and fed the striker.
He stretched out a leg, beat Steven Taylor to the ball and flicked it across Rob Elliot and into the far corner.
Next Pedro intercepted Rolando Aarons' pass towards Daryl Janmaat and executed a fine finish.
Chelsea fans turned their attentions to Terry, serenading the captain, who two weeks ago announced Chelsea would not be renewing his contract. The club maintain an offer may be forthcoming.
Chelsea had a third when Costa beat Fabricio Coloccini to the ball and fed Willian to score. Newcastle's midfielders back-tracked at half pace.
Terry felt the back of his leg and hobbled away after an aerial challenge with Aleksandar Mitrovic. The pair exchanged words soon afterwards and Terry was withdrawn.
But Newcastle barely tested Chelsea's reshuffled defence as the hosts had further chances.
Branislav Ivanovic had a shot blocked and Pedro fluffed a shot after Jonjo Shelvey gifted the ball to Costa.
Having lost their skipper, it appeared Chelsea might also have to withdraw Eden Hazard when Janmaat caught the Belgian from behind.
But Hazard, on his first Premier League start since January 3, continued.
Mitrovic was caught by Cesc Fabregas on the edge of Chelsea's box, but no foul was given and Cahill blocked a Shelvey effort before Mitrovic fired wide across goal.
The brief flurry of attacking activity early in the second half amounted to a purple patch for the visitors, who soon conceded a fourth.
Taylor failed to reach Fabregas' ball over the top and Pedro tucked in with ease.
A fifth followed when Traore tucked in Azpilicueta's cross for his first Premier League goal.
Hazard contrived to miss from close range before Townsend struck late on.