Gerrard's side went into second place in the Premier League after an impressive 3-0 victory at Southampton.
With Arsenal slipping up at Stoke and Manchester City playing in the Capital One Cup final, Liverpool are now just four points behind leaders Chelsea.
And Gerrard has admitted that the Reds are in the title race, echoing the sentiments of the away fans who chanted: 'We're going to win the league', at St Mary's.
"Well, I think it's very nice that people are talking about us and we are in the title race - there's no getting away from that," said the Liverpool captan. "We're in it.
"But it's important that we stay calm, keep taking it game by game and try to win as many as we can.
"Man City and Chelsea are still the favourites if you like because they've got that experience of going to win it.
"But I think they both know, listening to Jose Mourinho and Manuel Pellegrini, that we are a big threat because we've got no Europe and we can be fresh every game.
"It does suit us at the moment being underdogs. What suits us as well is that we've got a lot of time to prepare.
"We've worked on this formation all week. We chose to play a diamond and I think it shocked Southampton.
"We broke, played on the counter-attack superbly well and could have got more goals."
