Liverpool manager Jurgen Klopp has turned the Reds into challengers for the Premier League title, according to Newcastle boss Steve McClaren.
Newcastle host Liverpool on Sunday with Klopp's side having won seven of their last eight games in all competitions.
A win at St James' Park for Liverpool will also take them six points off top flight leaders Leicester.
"They are title contenders, in terms of the form they are in and the way they are going," said McClaren.
Klopp took over from Brendan Rodgers in early October and Liverpool drew his first three games in charge.
But the German has improved his side's fortunes, suffering just one defeat, which came against Crystal Palace, and leading Liverpool to the semi-finals of the League Cup.
"Everyone comes into a club in different situations," said McClaren, whose side are second-from-bottom of the Premier League.
"I don't think anyone would dispute what Brendan had done. He had brought in some very talented players, and you have seen that Jurgen has taken that on."
McClaren spent a spell in Germany as manager of Wolfsburg and twice lost out in games against a Borussia Dortmund side managed by Klopp.
"What Dortmund had, I can see that in the Liverpool team," added McClaren. "It's coming and they demonstrated on Wednesday [in beating Southampton 6-1] what they are capable of doing.
"They have got good quality players who work very hard. He is doing a great job."