Tottenham drew 1-1 at Liverpool on Saturday evening.
Following the stalemate, the north London side are four points above their fierce rivals but the Gunners have a game in hand over Tottenham.
And that leaves Arsenal in with a strong chance of reclaiming second, if not capitalising on any slip ups at the top from the Foxes.
Speaking before Leicester City's game with Southampton, Carragher told Saturday Night Football: "It's uncharted territory not just for Leicester but Tottenham. Are Arsenal back in the equation now? You'd have to say yes."
Next up for Tottenham is a home clash against Manchester United, before a trip to Stoke City.
Arsenal, meanwhile, travel to West Ham United next, showing there are no easy games for anyone as they all look to end the season as strongly as possible.