English equivalent for "Worm that lives in poison."
In Malayalam/Indian, there's a saying "Paashaanatthil krimi". It literally translates to
Worm that lives in poison.
It is used while judging people who keep bad company as being bad themselves. It is used to address someone inimically; to say that a person who can survive in poison is probably very poisonous himself.
Birds of a feather flock together means that similar people tend to associate with each other. It is not suitable here.
What can be an equivalent English phrase?
This is purely out of curiosity, and in any event, I don't intend to judge people.
The equivalent in English would be
If you lie down with dogs, you will get up with fleas
Prov. If you associate with bad people, you will acquire their faults
[The Free Dictionary]
Their usage example fits very well with your context.
Granddaughter: It's not fair. I'm starting to get a bad reputation just because I'm friends with Suzy and she has a bad reputation.
Grandmother: It's only natural. People think that if you lie down with dogs, you will get up with fleas.
You could consider using He that touches pitch shall be defiled (therewith) which means:
As a person who handles tar gets dirty, so someone who comes into contact with wicked people is liable to be contaminated by them.
[The Oxford Dictionary of Proverbs]
It is close to Man is known by the company he keeps which means a person tends to associate with people who are like him or her.
There's also "Judged by the company you keep", a common reference to this biblcal proverb.
Consider,
If you lie with scorpions, you'd better have a taste for poison. Aleksandr Voinov
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Tell me who you hang out with and I'll tell you who you are (Mexican-American saying)
That's why the first step in treating a person addicted to alcohol or drugs is to counsel them to stop hanging out with so-called "friends" who encouraged their addiction in the first place. "Tell me who you hang out with and I'll tell you who you are" is the way my mom put it. You.Inc
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He who goes with wolves will learn to howl; Live with the wolves and you will learn to howl; Live with wolves and you shall learn to howl; When you are with the wolves you must howl with them. Rec. dist.: U.S., Can. 1st cit. A Dictionary of American Proverbs
He who keeps company/hang around with wolves learns to howl. Mexican-American Saying
Meaning: If you hang around with people who have bad habits, these will rub off on you eventually. A Dictionary of Mexican American Proverbs
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You can't touch tar without getting your hands dirty Before It's News