The center back is in no doubt that the current England skipper will finish his career at Anfield and sign the new contract set to be offered to him by manager Brendan Rodgers.
Reds boss Brendan Rodgers declared that he was ready to offer his captain a new contract on Sunday, before Gerrard scored the match-winning goal against Aston Villa and made a brilliant goal-line clearance.
The 32-year-old's outstanding display against the Villans illustrated his continued importance to the Merseyside club, and Carragher is confident the Liverpool skipper's performances this year will be rewarded with a new deal.
"I'm sure Stevie will sign a contract and finish his career at Liverpool the way I've done," Carragher told reporters. "There is no doubt about that. I'm sure he'll sit down and sort it out in the next couple of months.
"Steve will be finishing his career at Liverpool. He is 'captain fantastic' every week. It's not just against Villa. He's been doing it for years, scoring at one end, saving at the other."
The defender pointed to his captain’s inspirational qualities, helping the Reds come from behind to win a Premier League game for the first time this season.
"It is something that has been questioned about us over the last few years, going behind in games and coming back," Carragher continued. "Following on from the defeat at Southampton, we spoke beforehand about putting on a performance. Winning that game now makes Southampton look like a blip because we were on a good run."
The Champions League winner insisted that his side remains focused only on the next game, admitting that the Merseyside club is not sure where it will need to finish to ensure European qualification.
"I don't really look too far ahead and to be honest if you asked most of the lads, they wouldn't even know what position would get us into Europe," the 35-year-old added. "Sometimes it is fifth spot, sometimes sixth, seventh. We'll just try and carry on and win games and see where it takes us."