Scholes: Liverpool are Champions League dark horses
Liverpool are preparing for their first Champions League fixture since the 2009-10 campaign, with Bulgarian minnows Ludogorets the club's first Group B opponent at Anfield on Tuesday.
The Merseyside outfit have history in the competition, having won it on five occasions, and former Manchester United midfielder Scholes said the home faithful might prove to be a big advantage.
"Liverpool are the dark horse of the competition this year," Scholes told ITV.
"Brendan Rodgers has done a fantastic job. The style of play he's adopted is exciting to watch and the players seem to have taken to him.
"I feel they will do well with the players they have.
"The big advantage they have is a home crowd. Anfield is always a hostile place to go, which is something Manchester City lack."
Defending champions Real Madrid are also in Group B, along with Swiss giants FC Basle.
Real are out to recreate history by becoming the first team in 25 years to retain the trophy but Scholes believes the La Liga club's decision to part ways with Angel Di Maria and Xabi Alonso has opened the door for the Premier League contingent.
"I think one of the English teams has the potential to win it this year but they have to get past Real Madrid," said the 39-year-old
"If you would have asked me before Real sold Di Maria and Alonso, two major influences in the team, I would have said no.
"Now I think they could be beatable. I believe an English team could win it this year."