Villa currently sits just a point above the drop zone and after succumbing 3-1 to League Two Bradford City in the Capital One Cup semi-final first leg on Tuesday night, Staunton has urged a much-improved showing from Paul Lambert's men.
"The game against Southampton, after getting stuffed 4-0 down there earlier in the season, is massive, it's crucial," Staunton said.
"This is the biggest game the club has faced for a very long time. One of the biggest they've played.
"If you look at the last three years it's been going this way for a long time. You can see the lack of experience in the squad but Paul Lambert's had to play the youngsters - there's no choice in the matter that's where the squad's at."
He added: "We were fighting for our lives. That's a proper dogfight but I think it's going to be even tighter this year.
"They've got some key players with experience coming back so you'd like to think they have enough to see them through but it's going to be tight. It'd have a devastating effect. But destiny is in our own hands."