Carragher welcomes the additional competition.
"I haven't seen a lot of him - little bits of highlights from the Copa America," he told liverpoolfc.tv. "For Uruguay to win it was a great achievement with the other nations who were in it, and I think he got Young Player of the Tournament. That shows he's got great quality and I think it's going to be a great addition to the squad.
"You can't think of yourself, you have to think of the club. One centre-back went so we needed another. Time will tell how good the lad is but his pedigree looks fantastic.
"Also, it doesn't look too big a price when you look at some of the prices for defenders now."
While Carragher could be expected to offer advice to a player who doesn't turn 21 until next month, our veteran defender predicts he might be the one doing the learning.
"He's probably been brought up playing a different type of football than I have, a South American style - so maybe I can learn from him as well," said the 33-year-old.
"It's not always about the older players helping the younger - it can work vice versa. You're always learning from different people."