The Liverpool captain has revealed he would have been disappointed if Luis Suarez joined the Gunners last summer as his talent was only worthy of a move to Real Madrid or Barcelona
The Gunners bid twice for the striker last summer in the belief that an offer of over £40 million would trigger a release clause, a contractual agreement that Liverpool denied at the time but since admitted did exist.
Gerrard admitted he would have been "disappointed" to see the Uruguayan join the Gunners and feels the striker was wrongly advised amid the interest from the north London side.
Wenger acknowledges that Gerrard was just keen for Suarez, who has since joined Barcelona in a £70m deal, to stay at Anfield but dismissed the initial remarks as unnecessary.
"You're never too good for Arsenal and Steven Gerrard knows that," he told reporters.
"But I can understand completely that he asked him to stay because he wanted [Suarez] to play with him and have a chance to win the Premier League. But it didn't happen, and anyway, Suarez left."
Wenger also fielded questions regarding Mario Balotelli, who was strongly linked with a move to the Emirates, insisting that reports of a deal were way off the mark.
"For weeks we were buying Balotelli from one minute to the other and it was all wrong," he said. "We were never in for him.
"We do not master the noises that come out."