The Liverpool captain says 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 50 million euros would trigger a release clause, a contractual agreement that Liverpool denied at the time but since acknowledged did exist.
Gerrard said 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.
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Wenger acknowledges that Gerrard was just keen for Suarez, who has since joined Barcelona in an 88 million euro 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."