Next season's fixture list is only set to be swelled by what Reds fans hope will be a return to the Champions League, but Carragher feels the manager needs to be targeting first-team additions rather than squad players in the transfer market.
"The actual team, the XI, could go up against anyone – we saw that in the big games with some great results in those games," Carragher told the club's official website.
"But over the season, especially around Christmas and January, it was evident that the squad wasn't big enough or strong enough. That needs adding to.
"But rather than just adding players to the squad, you want to add players to the team. If you add three or four players and they go straight into the first XI, three or four of those who were playing week in, week out last season go to the bench.
"It makes the bench a lot stronger and your team a lot stronger. It's not just numbers.
"It's about getting the right quality that can go straight into the team."