The 22-year-old picked up his second red card of the season on Wednesday as Rangers lost 1-0 to Aberdeen at Ibrox.
In doing so, Morelos also picked up what represented the Gers' eighth red card of the season.
Gerrard spoke at length on Tuesday over the importance of Rangers - who received six red cards in the whole of last season - improving their discipline.
And Craigan said on BT Sport that the Colombian striker simply cannot be trusted by his manager any longer.
"That is not someone you can put on the pitch and think ' I am trusting he is going to last 90 minutes’," said the former Motherwell man.
"He is the kind of player now for me the minute he gets a yellow card you need to take him off. You can't trust him that he is not going to make another foul or get involved. His mentality isn't trustworthy for me."
It would be a massive shame if Morelos - a £1 million signing from HJK Helsinki - tarnished what's been a brilliant season with ill discipline.
The South American is on course to record his best-ever season as a professional footballer, having hit 17 goals in all competitions so far under Gerrard.
He is a hugely talented player, but a flawed one and it's imperative that the Rangers boss settles him down from here on in.