The Reds were beaten 3-1 by Fulham at Craven Cottage on Saturday, with both Philipp Degen and Jamie Carragher getting sent off, and they now languish nine points behind leaders Chelsea.
But Hodgson, whose side condemned Liverpool to their sixth defeat in seven matches, believes the Anfield outfit still have it all to play for this season.
"You never know," he said. "They are a very good team, very well organised.
"They have some very good players and are unlucky at the moment that their talisman Steven Gerrard isn't playing and (Fernando) Torres isn't 100 per cent fit and has to be nursed through the games.
"But I can see them going on a really good run when they win seven, eight, nine games in a row and if that was to coincide with one or two defeats for the other top teams they would soon be up there again.
"With a quarter of the season gone it is very early to be writing anybody off.
"I remember not so long ago Manchester United were lingering in the middle of the table almost halfway through the season and went on to win it.
"If I was Sir Alex (Ferguson) or Arsene (Wenger) or Carlo Ancelotti I don't think I would be writing them off."
CompetitionHowever, the Fulham manager was realistic about his own side's chance of a top-seven finish and a place in the Europa League places again.
"To be one of the best seven teams in the league is going to be very difficult for us on an annual basis," he added. "The club is not necessarily geared for that.
"More and more money is being spent and the top four is rapidly becoming the top seven in terms of financial power.
"It would be nice if we could treat our fans to a season when they are not biting their nails into the last two or three games and be a good enough team to occasionally spring surprises like we did here."