That is despite the fact Lewis Hamilton took over the championship lead at Monza last weekend, after humiliating a struggling Ferrari at their home circuit.
The F1 legend, who is among the most famous former Ferrari drivers, is now the chairman and co-owner of the Mercedes team.
As for his split allegiances, Lauda told Corriere dello Sport newspaper: "It's okay for me.
"We won at Monza and that was a shame for Ferrari and their important event. But in Singapore maybe Vettel will change things again.
"Many times Ferrari has been faster than Mercedes. At Spa Vettel was very close. Okay, at Monza perhaps a little less, but in my opinion this was due to a mistake in the Ferrari setup.
"Ferrari will be the favourite in Singapore, but on the other hand it is difficult to say who will win. I hope it is Hamilton."
Yet if it is Vettel on top, Lauda admits that his 'heart' still beats for the Maranello team.
"Vettel is a number one driver," he said. "His heart is for Ferrari and if the team is competitive, you can't discount him."
Sixty-two points currently separate Ferrari from leaders Mercedes.