Arsenal believed they had met a release clause in Suarez's Anfield contract when they bid £40,000,001 last summer but Liverpool rejected the offer and Suarez's goals instead took Liverpool close to the Barclays Premier League title.
Gerrard understood that Suarez still had ambitions to leave, but proved right in his prediction that he could earn himself a move to Spanish giants Barcelona with an outstanding final season at Anfield - with Barca having paid £75million for his services this summer despite the four-month ban he received for biting Giorgio Chiellini at the World Cup.
"Last summer, when Luis was out in the cold, I told him, 'Don't go to Arsenal'," Gerrard told several national newspapers. "With all due respect to them, I told him he was too good for Arsenal.
"Luis' dream, from the first day he came to us, was to play for Real Madrid or Barcelona. I said, 'If you score 30 goals for us and win the PFA Player of the Year and FWA Footballer of the Year, they will come back for you.'
"I thought for his own sake, and to get our fans' respect, he had to give us at least one more year."
Suarez, 27, hit 31 goals last season, but Liverpool were pipped to the post by Manchester City in the title race.
Having rehabilitated his image in the wake of his bite on Chelsea' Branislav Ivanovic in April 2013, Suarez was then guilty of biting Italy defender Chiellini in Brazil - the third such incident in his career - to be hit with a huge ban by FIFA.
With the feeling growing that Liverpool had to cut their losses on the talented by controversial striker, Barca's offer was too good to refuse.
"You can't begrudge him his dream, leaving for Barca," Gerrard added.
"But I'd have been disappointed if he had left for Arsenal."
The Gunners have arguably benefited from Suarez's switch to the Nou Camp anyway, signing Alexis Sanchez who became surplus to requirements after the Uruguayan's arrival.
Liverpool continued their preparations for the new season by beating champions Manchester City on penalties at the International Champions Cup in New York.
The match finished 2-2 in normal time, with Stevan Jovetic scoring twice for City, first cancelled out by Jordan Henderson and then by Raheem Sterling.
That sent the match to spot-kicks and Liverpool prevailed 3-1.
Manager Brendan Rodgers is still keen to add to his six summer signings already but he will have to wait to begin work with one of his new arrivals.
Defender Dejan Lovren, signed from Southampton last week, will not join the club on the latter stages of their pre-season tour in America.
The Croatia centre-back, who completed his move on Sunday, will remain on Merseyside as he does not have the necessary travel documents.
"Unfortunately he can't come out here because I don't think he has got his visa to travel out, so he is working back at Melwood with the staff and he will be ready to join us whenever we get back," said Rodgers.
Further defensive reinforcements are expected with the Reds boss still chasing a left-back and there is room for another striker after a deal for QPR's Loic Remy collapsed.
Forward Rickie Lambert and midfielder Adam Lallana have also been acquired from Southampton, while Benfica winger Lazar Markovic provides more attacking options and Bayer Leverkusen's Emre Can has added depth to the midfield.
However, with Divock Origi loaned back to Lille for a year Liverpool still look light up front following the departure of Suarez.
"We still have some positions that we want to fill within the squad so that by the end of August we have a strong group of players to go forward with. We've still got some business to do," added Rodgers after the City victory.
"We've brought in specific players for specific roles, players that have the profile of how we work.
"A lot of the players that have come in, the transition has been very smooth and that should make the adjustment that bit easier.
"Of course some of them are young and coming to a different country, like Emre Can. That will take a little bit of time.
"The players are transitioning very well, though it will take a little bit of time."