Speaking on Gary Neville's programme 'The Overlap', the Scouser implied that the Reds are a better side than the La Liga giants.
"I've watched Real Madrid in the Champions League this season and they've lost more games in the Champions League than Liverpool have lost all season in all competitions," Carragher said, as quoted by Anfield Watch's Twitter account.
“Real Madrid are a very good team but they're not as good as Manchester City and I don't think they're as good as Chelsea - even though they beat both of them. You can spin it both ways with the spirit, the winning, the coming back.
“But they've carried a lot of luck in those games, which you need. If you win every game in the last minute coming from behind, if you're that good a team you don't get yourself in that position all the time. Manchester City should have battered them.
“Of course, Real can win - it's a one-off game. I just think if City or Liverpool were playing Real Madrid in a one-off game, having their team and playing near their best, they'd win the game. I'm confident."
Anfield Watch Verdict
Another night for the Champions League history books!
Heartbreak for Man City. Jubilation for Real Madrid.
— Football on BT Sport (@btsportfootball) May 4, 2022
It was a massive shock to the Spanish giants. However, since that game, they cruised through their group.
The real trouble came for Carlo Ancelotti's side when they reached the knockout stages. Real Madrid pulled Paris Saint-Germain in the last-16.
It got nervy towards the end of the second leg (3-2 aggregate victory), but they ended up securing their place in the quarter-finals where they pulled current European champions, Chelsea.
Real Madrid cruised to a 3-1 victory in the first leg against Thomas Tuchel's side thanks to a Karim Benzema hat-trick, but after a great comeback from the blues in the second leg, the game went into extra time.
Once again, Benzema came to the rescue and scored the winning goal in the 96th minute to take the La Liga side to the semi-finals, where they faced Premier League champions Manchester City.
The clash turned out to be one of the best Champions League semi-finals of all-time. Madrid lost the first leg 4-3. Then, defying all odds, and needing two goals to take it to extra time, Rodrygo scored a brace 90 minutes into the second leg.
Shortly after, Benzema scored a penalty in extra time, which sent Real Madrid to the final.
Hopefully their luck has run out and Liverpool can cruise to an easy victory against the Spanish giants, but who knows, this is the Champions League and anything can happen in this crazy competition.