The 35-year-old will play in his 30th and final Merseyside derby this weekend, after which he will have just two matches left in a distinguished career with the Reds. The centre-back is moving into television punditry next season and Rodgers admits their gain is not only a loss to Liverpool but the game itself.
"Last week at Newcastle (in the 6-0 victory) how he marshalled the defence and how he played - everything about his game is at the top level," said the Reds boss. "I can't think of enough words to describe him. His performance level has been incredible."
Rodgers added: "It (retirement) is such a shame because he probably could play on but he has already made his mind up.
"His dream was to go out at the top and he is fulfilling that dream because he is a top operator at this level."
When he runs out at Anfield on Sunday, Carragher will join an illustrious club of Ian Rush, Bruce Grobbelaar, Alan Hansen, Ian Callaghan and Ronnie Whelan to have played at least 30 times against the Toffees.
For Bootle-born Carragher, a boyhood Everton fan, and club captain Steven Gerrard, from Huyton, the Merseyside derby is a significant event in the season.
"Everton is a massive game for Jamie, he's a boy from the city and Steven (Gerrard) as well," added Rodgers.
"These are guys who have shown passion in every single game - but this one adds a little bit more for them.
"I am sure Jamie will want to play his last derby and finish it on a high."
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- Merseyside derby