The Uruguayan ace has netted a total of 23 goals for the Reds this term and Gerrard is confident he can become an even harder player to detain if he continues to improve.
"For me he's been player of the year, across this league and a lot more leagues," he told BBC Radio Merseyside.
"There are probably only one or two people who you could say have been better than him this season."
He added: "How much better can he get? I'm not sure, but it's a scary thought if he does improve on how he's been performing this season."