Owen is a long-time friend of the veteran centre-back and has agreed to turn out again in a Liverpool shirt - despite now being a Reds player.
The England international's previous returns to Anfield with Newcastle have not been the happiest of homecomings and there have been some suggestions the welcome will be even more hostile now he plays for Reds' arch-rivals, even though it is a testimonial.
Carragher said that would be unfair on Owen, who some fans have not forgiven for leaving the club for Real Madrid after allowing his Liverpool contract to run into its last year.
"I hope it doesn't affect the reception, I think he deserves a great one for what he did for Liverpool," said the centre-back.
"He was a fantastic player - right up there with the greats for what he did.
"He left in difficult circumstances but when he went to Manchester United his career was on a bit of a downward spiral, he'll admit that himself.
"The chance to go to one of the biggest clubs of the world was difficult to turn down.
"He moved and upset some people but he had to do what was right for himself and his family.
"His kids were just starting school and he wanted to move back home so that came into it as well." What do you think? Have your say.