The former defender believes that this season may be the perfect opportunity for the Gunners to challenge.
The Gunners’ hopes of qualifying for the latter stages of the competition are hanging by a thread after they lost their first two group games to Dinamo Zagreb and Olympiacos.
With two games against an in-form Bayern Munich side now coming up, reaching the latter stages looks even more unlikely for Arsene Wenger’s side.
Arsenal do sit second in the Premier League table after a 3-0 win over Manchester United on Sunday, though, and Carragher believes that an exit from Europe could aid a potential title challenge this season.
“Arsenal are never going to win the Champions League with this team, they usually get knocked out of the quarterfinals at best,” he said on Sky Sports 1 on Sunday evening (October 4). “So if they go out earlier it may actually be an advantage for them.
"They’re not the best in the league, Manchester City are the best, so if they want to win the league, it may be that they need something and going out the Champions League may be it.”
This season may be the perfect opportunity for Arsenal
The former Liverpool defender has also suggested that this season may be the perfect opportunity for Arsenal to compete given the struggles of their rivals.
Manchester City had started the season on fire but have lost their way in recent weeks, Manchester United have not been impressive, while Chelsea’s title defence has so far been a disaster.
Carragher believes that both of the Manchester clubs will spend big again next summer while Chelsea will not endure another start like this season, making this campaign a perfect one to challenge in.
“If you go out, people complain about losing the money but they’ve got £200m in the bank so that doesn’t matter,” he added.
“Next season Chelsea will be back. City and United will spend big. This may be a season where they’ve got to take as much as they can.”