The Blues were eliminated from the Champions League in December and they currently sit third in the Premier League table, 16 points behind leaders Manchester United.
However, Benitez expects Chelsea to compete for major honours in the not-too-distant future.
"I think this group of players has great, great potential," he told The Mirror. "That is more clear now in my head than it was when I arrived.
"Their possibility to grow is even bigger than I suspected. The average age of the squad is fine. The potential is there and the group of players is keen to learn.
"They are very good professionals and they are working hard and they are keen to learn and for me that is a big advantage. Some of them need more confidence and some more experience in the Premier League. They can compete now but they can be even better."
Benitez's current contract at Stamford Bridge is due to expire at the end of the season.