Jose Mourinho's side sit 15th in the table after five defeats from 10 games, and trail joint-leaders Arsenal and Manchester City by 11 points.
Nevertheless, Deco feels his old club are by no means out of the race just yet.
"In my opinion, the Premier League is stronger than in the past few years," he told BBC Sport.
"It is difficult. All the clubs have a lot of high-quality players. But the season is still long.
"I think Chelsea can still win the title. Of course, it is difficult when you are losing games. But I think a gap of nine or 10 points can still be closed in the Premier League."
Mourinho's position has come under fire following Chelsea's poor start to the campaign, but Deco is confident that his former boss has what it takes to turn things around.
"Mourinho is one of the best coaches in the world. He is one of the best I have worked with," he said.
"He knows his team and he knows how to play because they won the title last season. He knows his players very well."