With 12 games remaining of the Barclays Premier League campaign, Liverpool are currently fourth in the standings.
"It's vitally important - for us to go to that next level, that's where we need to be," he said.
"I took over a team that was eighth, and that's what we've been building towards over the last 18 months.
"If we can get to that elite competition, then of course it attracts a different type of player as well. It's very important and hopefully it will be this year."
He added: "We have got lots of people that we're looking at. We'll assess where we are at the end of the season and take it from there."
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