Carragher has also backed the Reds to go all the way and win the trophy.
Jurgen Klopp’s men beat Villarreal 2-0 in their semi-final first leg on Wednesday night.
In the other semi-final, Manchester City secured a 4-3 victory over Real Madrid in a thriller at the Etihad Stadium.
Carragher told CBS Sports:
“I think Liverpool will win the Champions League. The league I’m not so sure, Manchester City have a slight advantage in that if they win all their games they’ve won the league.
“The Champions League, it feels like it’s Liverpool’s competition and they’ve got one foot in the final and I don’t think anyone else can say that. I think Madrid will go through. When you miss that many chances in the first leg you have got a massive problem. It’s a big standout game.”