'Getting rid of Torres was a masterstroke', he says
The Reds missed out on the Champions League last season and remain likely to face a similar situation this time around as well.
And with the Spaniard having recently been coy about his future, Kennedy believes that the former Villarreal shot-stopper is "irreplaceable".
"It has been suggested to me that Pepe Reina is unsettled because of the direction the club has been heading in over the last couple of years," said the ex-Red, according to The Mirror.
"But I’d be amazed if [manager] Kenny [Dalglish] thought it would be a good idea to cash in on him like he did with [Fernando] Torres because, for me, Pepe is irreplaceable.
"After spending the last five or six years at Liverpool, his talent and experience make him the best goalkeeper in the world.
"He may be feeling a bit disillusioned about things at the moment, but I think he is crucial to Liverpool being a successful club in the next few years.”
He added: "It hasn’t taken long to see that getting rid of Torres was a masterstroke.
"Fernando was a terrific player for Liverpool, but he has had a difficult few seasons and when strikers suffer a long-term loss of form like he has you wonder whether their time is up. It was a great piece of business generating £50million because Kenny was able to bring in two strikers for the price of one in Luiz Suarez and Andy Carroll.
"It’s a totally different scenario with Pepe because, for me, any replacement is going to be a step down."