Gary Gillespie, who was part of the Liverpool team that dominated English football in the 1980s, says Juergen Klopp's current side are the best he has seen in years.
Liverpool, who travel to face bitter foes Manchester United at Old Trafford on Sunday, are second in the Premier League table, but are the division's top scorers with 48 goals having played some exhilarating football in their opening 20 games.
"The Premier League title is the Holy Grail for Liverpool fans at this moment in time," Gillespie told Reuters in an interview.
"I've been covering Liverpool for TV and radio for around 17 years now (after retiring as a player in 1997) and this is probably the best team I've seen. That's how highly I regard them for being title contenders.
"I think they're a very, very good side," added the three-times league title winner. "Whether they have enough to go all the way remains to be seen but they are exciting, they get people up off their seats and they are a very attractive side to watch."
Sunday's encounter will be the 50th Premier League meeting between the rivals, with United holding the upper hand in the modern era, winning 27 of the previous 49 matches.
The north west derby pits the two most successful teams in the history of the English game against each other and Gillespie says the rivalry is even more fierce today than during his time at Liverpool in the 1980s.
"I think it has always been a fiercely-contested fixture and the tradition of the two football clubs dictates that," said the 56-year-old, who made 214 appearances for Liverpool and scored 16 goals in an eight-year spell on Merseyside.
"The rivalry is growing and growing purely and simply because Liverpool haven't won the Premier League. The rivalry is absolutely enormous between the two clubs just now, probably a lot more so than in our day.
"United were always a threat and always played well against us. It's always been a tough game and a fixture the fans look forward to."
With nine wins in a row in a 15-game unbeaten streak across all competitions, Jose Mourinho's side will pose a big test for a Liverpool team weakened by the absence of top goalscorer Sadio Mane, who is on international duty with Senegal at the African Nations Cup.
"Manchester United are in a really good run of form and they've won the last six league games on the spin," said Gillespie, who made the switch from Coventry City to Liverpool in 1983.
"They're a strong side at this moment in time and it looks like Jose Mourinho has got them playing the way that he wants. He's got a settled side and he knows how to get the best out of them."
With doubts over the fitness of Liverpool captain Jordan Henderson and centre back Joel Matip, Klopp may not be able to call on his strongest side for Sunday's match.
The German, however, has lost only once against Mourinho in their last six meetings, including a 0-0 draw at Anfield earlier in the season, and Gillespie expects him to maintain his good record against the Portuguese. "Liverpool dominated the game at Anfield and were unfortunate not to get all three points. They certainly won't be going to Old Trafford with any fear. It's a place to perform," he said. "If you put the two strongest starting 11 sides together, I would back Liverpool to win all day long, but they haven't got that."
(Editing by Toby Davis)