The Reds are sitting at the top of the standings on Christmas Day on goal difference after bouncing back from the defeat to Hull earlier this month with four straight victories.
"I think we're title contenders if we're in the title race with 10 games to go - I don't get carried away or I don't change targets or raise expectations around the city just because we've started the season very strong and we're in amongst it in November and December," the midfielder told Sky Sports News.
"To be in the title race you've got to be there with 10 games to go with a realistic challenge of winning it. I do have confidence and belief in my team-mates that we're capable of surprising a few people this season."
However, Gerrard, who will miss Liverpool's next two matches due to a hamstring injury but is targeting the clash against Hull for a return to boost the Merseysiders in the second half of the season, is desperate for a minimum top-four finish in the league for the first time in five seasons.
"We keep to the ambition we had at the beginning of the season. We want a good run in the FA Cup and we want to finish in the top four," he added.
"That doesn't change because we're sitting pretty in the league.
"If we were to finish outside the top four I think it would be a disappointing season.
"With the talent we've got in the squad and the way we've started, we've set ourselves up with a magnificent chance of finishing in the top four so if we were to let that slip and finish outside everyone would be disappointed.
"The key to us is to finish inside the top four, it helps the club financially to bring players in and to end that long spell without it."
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