Liverpool and England defender Carragher, 35, is ending his 17-year playing career when this season finishes - and Yorath insists his 700 plus games and 38 caps for his country make him perfectly qualified for the Elland Road job after Neil Warnock resigned.
Yorath told the People: "I think Jamie would be the perfect choice to take over from Neil.
"I know that might raise a few eyebrows, and people might say that Leeds is too big a job for a first-time manager. But I don't see it that way.
"Carragher would be a breath of fresh air - and that is exactly what is needed at Elland Road.
"He's got no managerial experience, I accept that, but what he does possess is a fantastic pedigree and a wealth of knowledge built up over 17 years at Anfield."