The Reds will be hoping to stop Zinedine Zidane's side from winning the competition for the third time in a row when the two sides lock horns in Kiev on May 26.
Although Real have seen by many fans and pundits as favourites over Jurgen Klopp's charges, Liverpool legend Gerrard fancies his former side to impress against Los Blancos.
"I think we've got a really good chance," the new Rangers manager told Sport360.
"I wouldn't say on current form we're going into the game as underdogs. But, I suppose, Jurgen Klopp and the boys will want to go in as underdogs because it takes a little bit of pressure off.
"I think the form they've been in, how they've performed in the last two games against Roma, especially with Mohamed Salah. I think we go in with every confidence and belief that we can get the job done."
Liverpool are in the final of the competition for the first time since 2007, having won the trophy two years earlier in Istanbul.