Arsenal winger Walcott suffered an anterior cruciate ligament injury in the Gunners' FA Cup third round victory over Tottenham, ruling him out for six months and ending his dream of appearing for his country in Brazil.
Sterling has emerged as a key member of Brendan Rodgers' side, starting the last 10 Premier League games, and although the 19-year-old has only one England cap to his name, Gerrard is convinced he can play his way into Roy Hodgson's plans.
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"Raheem is in top form at a fantastic time - his performances of late have been sensational.
"I’m obviously disappointed for Theo. There are many candidates to replace him. Lennon’s playing well. Andros Townsend, Oxlade-Chamberlain’s back.
"But if you are looking at like-for-like, pace down the wing, someone who can make, score and create, then Raheem has got a fantastic chance.
"He’s got all the tools to do it, it’s up to him now. If you are a full-back you don’t want to play against pace and it’s pace when it’s coming at you all of the time. He is relentless.
“He’s a team player, too. Everyone knows Roy Hodgson, he likes a wide player who can defend as well. He’s got everything going for him. Now it’s up to him to keep putting in that level of performance."
Gerrard has, however, warned Sterling that he will have to react and pick himself up when he suffers an inevitable dip in form.
"You’ve got to understand his age. He’s learning the game. He’s got a fantastic manager to help him through that," the veteran Liverpool midfielder added.
"He’s only 18 [sic] and you are going to suffer a dip in form. Who doesn’t have a dip at 18 years of age? But the mark of a good player and how good any player is going to be is how they come back from that. Can he react?
"To come back the way he has, he’s been one of our most consistent players in the last couple of months. He’s been brilliant."