The Reds have been a club rivatalised since Kenny Dalglish returned to the managerial hot seat in January, picking up 33 points from their final 18 matches - comparing favourably to the 25 picked up in the previous 20 under Roy Hodgson.
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Dalglish has already been busy in the summer transfer market, signing midfield trio Charlie Adam, Jordan Henderson and Stewart Downing for a combined £43 million.
And, speaking exclusively to FourFourTwo.com, Lawrenson spoke of how impressed he has been by his former team-mate's dealings so far,
“I think if you take the transfer activity back to January, they’ve signed [Andy] Carroll, Luis Suarez, Henderson, Adam and Downing and sold Fernando Torres and Ryan Babel and it’s cost them £40 million," Lawrenson explained.
“So effectively they’ve got five players for £40 million and they’ve actually improved the team.
“I think that was the thing, they’ve improved the team and improved the squad, so from that point of view everybody looks forward to the new season with renewed optimism."
Yet despite this feel-good factor surrounding the club, Lawrenson has poured scorn on claims the Anfield side are once again ready to start competing for the league title.
“Kenny’s appointment as manager has made a big difference to them, but I think people are getting a bit carried away by saying they can win the league. They’re probably still two players short from being able to do that.
“But that tells you how far they had to come - people forget they spent a bit of time in the bottom four last year. So in terms of the season’s prospects, I think they have to be looking at trying to hit the fourth Champions League spot, which I think could be achievable.”
And despite now being well stocked in midfield, Lawrenson feels his former club still need to tweak their back four.
“I think everyone knows that they’ve wanted a left-back, seeing as they can’t guarantee Fabio Aurelio will be fit for the season. That’s obviously a problem position, although Glen Johnson has played there for Kenny and done extremely well. But you’d want a natural left-sided player there if you could find one.
“I think they need another centre-back. [Sotirios] Kyrgiakos will always be fourth pick; Jamie [Carragher] has been an unbelievable player for Liverpool, but he’s slowly coming towards the end; [Daniel] Agger’s never fit, which is a real problem because he’s a really good footballer.
"Then there’s obviously Martin Skrtel, who generally plays by virtue of being the only one fit. So you’d want another centre-back, a bit more competition for places.
“It may be they can’t address that until January, but that apart, competition for places in midfield is excellent."
The Kop hero, a member of the 1984 European Cup-winning side, also believes Dalglish may need extra cover up front, with Luis Suarez at risk of burn-out having featured at both last summer's World Cup and the Copa America in Argentina this month.
“The only other worry would be maybe someone else to help cover for Suarez, because he has played non-stop football for a long time now.
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