The 23-year-old was speaking at a press conference for his official unveiling, and said a club of the Reds' size should be playing in Europe’s premier club competition.
He also praised the squad's performance in the 2-2 draw with Manchester City on Sunday, which he watched from the directors' box at Anfield.
"If you watch the game against Manchester City, you see that the style the team is playing is very good and of course, Liverpool has to play in the Champions League," he said. "A big club like Liverpool has to play every year in the Champions League and we will do everything to get in the top four.
"Also there is the FA Cup, League Cup and Europa League, and with the potential we have here, we can do some good things."
Sahin also praised the style that new boss Brendan Rodgers is trying to implement on the training pitches at Melwood, and claimed he will fit right in to the type of football the Northern Irishman is working towards.
"The project with Liverpool and Brendan Rodgers is the best for my situation I think - that is why I am here," he added. "I think the style I play is the same as how the manager wants the team to play.
"I have settled in very well and I hope it will be the same on the pitch and that we will have a great season."
The young midfielder also remained coy on the prospect of a permanent transfer, stating he would wait to see what happened come the end of the season before making a decision on his future.
"In football you never know," he continued. "I am here for this season and then you never know what will be happening in a few months.
"I am looking forward to playing this year here and after, we will see."
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