The Uruguayan was the subject of intense interest from Arsene Wenger's side last summer as they attempted to trigger a release clause in the striker’s contract.
After a prolific final season at Anfield in which he topped the Premier League scoring chart with 31 goals, Suarez has sealed his move to Barcelona and Gerrard says he always felt the striker was destined for either Camp Nou or Real Madrid.
“I would have been really sad and disappointed to see Luis go to Arsenal,” the 34-year-old told reporters.
“With all due respect to them, I said to him that he was too good for Arsenal. I said if you score 30 goals for us and win the PFA Player of the Year, the press Player of the Year – I knew he was going to win them – I told him Real or Barcelona will come for you.”
“I think he got the wrong advice last year from people around him, from people saying he needed to play in the Champions League and it did not matter who it was for.
“A lot of people might still think he should have given us one more, but my big dream was to play for Liverpool, and the foreign players’ big dream is to play for Real Madrid or Barcelona, that’s a fact.
“His wife is from Barcelona and I don’t think you can begrudge a player like that, who has worked so hard for his dream. You can’t go against him when he says he is leaving for Barcelona.
“His dream from the first day he came was to play for Real Madrid or Barcelona. Last summer when he was out in the cold and training on his own that’s the conversation I had with him. I said, 'Dn’t go to Arsenal’.”
Brendan Rodgers’ side finished second in the Premier League last term, pushing champions Manchester City all the way to the final game.
And despite losing Suarez, Gerrard thinks Liverpool are capable of launching another assault on the Premier League summit.
“Last year we were in it until the end and that has given us the belief that we are genuine title contenders,” he said.
“I believe if we had Luis Suarez we’d be favourites.
“I’m disappointed to see him leave now but I am happy for him that’s he has got what he wants and deserves. Since day one he has been phenomenal in training every day and in the games.”