A run of good form around Christmas had put Chelsea within eight points of Manchester United with a match in hand, but the Blues have plummeted of late, thanks mainly to a dire run of home form.
Benitez's team have won just once at Stamford Bridge in the league since he took over seven weeks ago, leaving the Blues some 13 points off the summit.
A shock loss to bottom side QPR, and a disappointing 2-2 draw with Southampton on Wednesday, means the Blues are now in danger of failing to qualify for the Champions League for the first time since Roman Abramovich bought the club 10 years ago.
Benitez, who is expected to leave at the end of the current season, remains upbeat about winning silverware to appease the disgruntled Chelsea support, but he admits the league title is now out of reach.
"In terms of the league I don't think we can do it," Benitez said.
"But the Capital One Cup is there, the FA Cup is still open and the Europa League is still open.
"I just have to give the team the confidence that we can win against anyone. If you have that belief it becomes easier.
"The team is very close. We have (John) Terry and (Frank) Lampard back from injury. Now we have to be more consistent."