The Light Blues beat Celtic in both meetings at Ibrox last season and the Gers’ boss believes any wariness of this fixture amongst players and fans has now been replaced by excitement.
Both sides are unbeaten in the league so far this season, with Rangers unbeaten in all competitions.
Speaking to the media Gerrard said: “You can only judge from the beginning of the season to now and they’re doing very well. They’re scoring goals, winning matches and have only had one defeat.
“When I first came in there was a fear of Celtic. The supporters, and I predict some of the players, feared these fixtures but over the course of the 12 months we’ve proved that’s no longer the case and on our day we’re a good match for Celtic.
“This club has had a tough time. It’s been down the leagues and been back up. Celtic continued to have Champions League money and to strengthen and bolster the squad.
“It’s been a real catch up. The gulf was huge and it was always going to take time to close that gap.
Meanwhile Gerrard reacted to Rangers Europa League draw which has matched them with Porto, Young Boys and Feyenoord in Group G.
He continued: “It’s a fantastic draw for us. There are some really tasty games in there and some nice countries to visit.
“But we’re not in that group to make up the numbers. We want to give a good account of ourselves. We want to do our fans proud and surprise a few.
“We know we go in as the underdogs but we’ll give it our best shot and do everything we can to get out of the group.
“The level will go up again now. With all due respect to last year, when we went into the group stage Villarreal, Rapid Vienna and Moscow presented a really tough challenge.
“Again it will be the same as Porto, Feyenoord and Young Boys are top teams. Each team will pose different threats but we’ll be ready.”