Coyle - who has had to work on a shoestring budget - says Liverpool's improvement is only to be expected given the amount of money spent.
Coyle said: "On New Year's Day they only beat us with an offside injury-time goal. Joe Cole was offside, stood on the line.
"If you want to compare Liverpool today with back then, they look a very good side.
"Offensively, they look like they can score goals.
"Having said that, if you gave me £110m I am sure I would have a team that look dangerous every time they walk on to the park.
"Kenny has done that. He has signed some good players, youthful players who are going to grow and get better "They are on an upward spiral and good luck to them but, as I said before, finance plays a huge part in football."