The 35-year-old effectively made his decision a year ago when he was struggling for a first-team place under former manager Kenny Dalglish. That situation did not change under new boss Brendan Rodgers as he made just one league start up until mid-January, since when he has started 14 of Liverpool's 16 in the Premier League.
"It's made me go the other way, to be honest. It's made me think it is the right time," he said.
"It's nice that I'm in the side and people are saying I'm doing well and why not stay for another year?
"It's better than them saying you should have gone a year ago. I prefer it to be like that and get out while it's going well because it can easily change."
He will make his 737th and final appearance when he leads out the Reds out at Anfield against QPR on the last day of the season at Anfield. But there will be no tears from the centre-back when the match is over - and no thoughts about a u-turn.
Asked when he made his decision to quit Carragher added: "About 12 months ago, the end of the season. I was in and out of the side with Kenny. I was thinking about it in the summer but I had a year to go and a new manager coming in. I knew then it was always going to be my last season."
Carragher's departure will leave captain Steven Gerrard, who misses the final match of the season after a shoulder operation, as the one remaining half of Liverpool's 'Scouse heartbeat'. However, the defender believes the club is in a healthy position at all levels.
"It's always good to have a few local lads in the side. That's the aim of everyone," he said. "Every club will say they want to bring players through from the academy, that's why you have academies and put so much time and money into it. But the players have got to be good enough. If they're good enough, brilliant - get them in there.
"I'm always positive about the club. The last few years haven't been great for us, with league positions and missing out on the Champions League. But with the new manager coming in and the run we've been on in the second half of the season it gives us a lot to look forward to for next season."