Going into the November international break, Liverpool sit second in the table, just a point behind leaders City after their 3-0 win over Brentford on Sunday.
With 27 points after 12 games, Jurgen Klopp's side are ahead of third-placed Arsenal by virtue of their superior goal difference.
The Gunners proved to be City's closest challengers for the title last season as Liverpool faltered in a disappointing campaign, but a strong start for the Reds this term suggests things could be very different in 2023/24 come May.
Richards, asked who he rates as having a better chance of winning the title out of Arsenal and Liverpool, opted for Klopp's resurgent side.
The 35-year-old told The Rest Is Football podcast: “I would say Liverpool.
“Just because Salah and by all accounts Van Dijk had a really good game today (against Brentford).”
Following Richards' claim, Newcastle legend and pundit Alan Shearer added: “He did have a good game. He looked back to his best, he read the game very well.
“And they are always going to score goals Liverpool, with the talent they have up top.”
Richards' title race assertion is backed up by Opta Analyst's predictions which put Liverpool the most likely team to finish second this season (behind Manchester City) – with a 43.7% probability.
Arsenal, meanwhile, are only given a 34.4% chance of coming second, with third their most likely position.
By Opta's reckoning, Jurgen Klopp's side have just a 9.1% chance of lifting the title – though that is preferable to Arsenal's meagre 5.6%.
Though his positive outlook in Liverpool's season is likely to find a lot of agreement on Merseyside, Richards' punditry infuriated fans earlier in the season when he suggested that Mohamed Salah is 'only' scores goals.
He said: "You look at Liverpool, Salah scores all the goals, he doesn’t do a lot else really.
"Yeah (he gets assists), but it’s rolls across the box, it’s not like dribbling past three players and then, that’s what I’d say.”