The former Scotland international believes Gers fans will not settle for second best.
The 50-year old enjoyed great success in England with the likes of Blackburn Rovers and Manchester City in the nineties and spent two seasons at Ibrox.
His brief stint in Glasgow hammered home the importance of triumphing over Old Firm rivals and he feels the expectations are that Rangers should aim to do so this season, despite the obvious differences between the teams.
Lubo Moravcik - Celtic v Rangers
“Rangers might not have the finances of Celtic but the fans have the same expectations," Hendry said.
“You don’t look at Rangers being a club on the up, which they are. To the fans, it’s Rangers and they should be performing. I understand that expectation.
“Even when I got there in ‘98, people would say it’s only a two-horse race. That may be so, but you don’t want to be second in a two-horse race.
“You can’t afford to be the loser out of the two - you need to be the winner or all hell breaks loose. They will learn that pretty quickly,” he added.
Rangers manager Mark Warburton
Mark Warburton has been tasked with building a squad that are capable of pushing Celtic all the way and while it is too early to say whether will manage that this season, they certainly seem to have the most capable squad on paper among the rest of the division.
The likes of Nico Kranjcar and Joey Barton have added real quality and experience to the heart of midfield, while Jordan Rossiter and Joe Dodoo are excellent young prospects.
Celtic manager Brendan Rodgers
Celtic also look strong however, with their three signings thus far looking like excellent additions, and overcoming Brendan Rodgers’ side will be a monumental challenge.
Regardless of the realities of the current differences between the two squads, Rangers fans will expect and insist that their team gets one over on the old enemy – and the Hoops wouldn’t have it any other way.