Liverpool have lost five league matches so far this season and last night had to settle with taking just a point from Birmingham and it is their less than impressive form that has led Terry to write them off.
Related ArticlesBenitez rules out Torres surgeryDavid Ngog cheated to win penalty, says CarsleyDon't knock divers for having the X-FactorLiverpool 2 Birmingham 2How can David Ngog still get away with blatant cheating?Liverpool dive to new depths"Liverpool have slipped away a bit and it's going to be difficult for them now," he said. "The way the other three teams are playing I think it'll be between us.
"Arsenal are playing some free-flowing football and scoring goals - it's just when they pick up injuries they tend to miss a few key players.
"[But] it's between the three of us - ourselves United and Arsenal."
However, the Chelsea captain also added that he and his team mates have no intention of letting their lead at the top of the table slip.
Despite three tough matches against Arsenal, Manchester City and Everton to play in the next month, Terry is convinced Chelsea can stretch the gap further.
"We're not going to settle for a five-point gap, we want to increase that lead," he said. "It's encouraging that we won both our titles leading from the front. That's in the back of our minds and it could be key for us. Fingers crossed we can do the same again.
"We have already won more games against the other teams in the 'Big Four' than we did last season and that gives us confidence. It's a good psychological lift for us because it's where we lost it last year."