Falcao joined Manchester United on a season-long loan deal from Ligue 1 outfit AS Monaco in the summer of 2014.
Much was expected of the highly-rated striker this term, but he has endured a frustrating 2014-15 campaign.
The Colombia international has struggled with injuries, and has also not play as well as he should have when fit.
In 26 Premier League appearances this season, Falcao has scored four goals and created 18 chances, while having a pass accuracy of 86% and a pass accuracy of 55%.
The 29-year-old former Atletico Madrid star has won 19 headers, 13 dribbles and 9 tackles in those 26 league games.
Falcao is scheduled to return to Monaco at the end of the season, and it is unlikely that United will sign him on a permanent deal.
Ranieri, who managed the striker at Monaco, believes that last season’s serious knee injury is a major reason for the former River Plate star’s struggles this campaign.
The Italian has also backed Falcao to have a better time in the Premier League next season.
“It is very strange, very strange because Falcao is fantastic in the box,” Ranieri told Sky Sports. “He had a very bad knee injury last season, and maybe it is difficult to react immediately. I think next season will be much better.”
When asked if Falcao can still be a success in the Premier League, the former Juventus boss said: “He is not a creative player. His job is to score. He smells goals. I think the Premier League suits him.”