Manager Jurgen Klopp is expected to add new faces in the January transfer window.
After a bright start under manager Jurgen Klopp, things have taken a turn for the worst in recent weeks with a series of disappointing displays.
The Reds are currently five points off the top four and without a win in four games after being beaten 3-0 by Watford at the weekend.
Many are expecting Klopp to be busy in the January transfer window as he looks to change his squad and Carragher says he needs at least four new faces at Anfield.
"If I was Klopp, I'd be thinking goalkeeper, two centre-backs and a holding midfield player," he told Sky Sports.
"Forget the City and Chelsea wins earlier in the season, you play the top teams once a month, there's only four or five of them.
"But Newcastle and Watford, they are the type of teams you play week in, week out, and I think they have been a major shock to Klopp. This is what the Premier League is like, and Liverpool haven't got the players to cope in those games."
One area that Carragher has surprisingly not picked for improvement is up front.
Klopp's side are seriously lacking in goal-scoring prowess, with Daniel Sturridge their best option but unable to maintain his fitness.
Elsewhere, Divock Origi is still a work in progress while Christian Benteke has so far struggled to prove his worth since joining from Aston Villa.
So while Carragher has named the four positions he believes need improving, Klopp may believe that a fifth is also in need of reinforcements in January.