Carragher has been a key figure in the Liverpool dressing room, even if he hasn't contributed to the on-field aspect as much as he would have liked in recent seasons.
Downing told The Mirror about Carragher's influence in the changing room: "I was as shocked as anyone when Carra announced he's retiring. He has been outstanding in the last couple of weeks and I thought maybe he's got the itch back to give it one more year.
"But I can understand it in a way, because he's not one of those to be sitting around - you can see he's frustrated when he's not playing.
"It would be great to get a top-four spot and to win something - for him to go out on a high.
"You could see what the League Cup meant to him last year, so it would be nice to win something for him, and we still have the Europa League to do that.
"I think top four is realistic if we play as we have in the last two matches -Daniel Sturridge has been a big signing, he's given us an added dimension with his movement and goals.
"If we play as we have been, we have a chance. We've dropped points in games we should have won, but we have a lot of winnable games. It's just about consistency."
Even though Carragher has signalled time on his playing career, Downing fully expects the Liverpool player to remain in football, believing he has all the attributes to become a great manager.
"Carra's going for the whole game and you can see he's got the potential to be a manager, the way he thinks about the game and knows so much about every player.
"After [the loss to] Oldham, I won't repeat what he said in the dressing room - you wouldn't want to know - but he was the first to say something.
"With people like Carra and Stevie Gerrard, when something needs to be said, it's said. They've been here such a long time and understand what is needed.
"Ask any full-back who's played with him - you can probably hear him from the sidelines yourselves. I've been left-back and you're thinking, 'He just doesn't stop!'
"Some players can switch off in games but he's always on the case, and there aren't many of those around any more.
"It's a real shame he's stopping, and he will be a huge loss to us."