The Reds' title challenge suffered another setback on Sunday when they were held to a 1-1 draw by Manchester City at Anfield.
They are now seven points adrift of Sir Alex Ferguson's champions, but they still have to play at Old Trafford.
And Benitez admits that nothing less than victory against their biggest rivals will do, otherwise their dreams of a first title since 1990 will be gone.
"I think we will have to beat Manchester United now," said Benitez, whose side are due at United on March 14th - a match you can see live on Sky Sports 1 and HD1.
"Clearly it is more difficult now. It is a bad result.
"We have to beat Middlesbrough and Sunderland and start thinking about if we can win at Old Trafford.
"You never know what can happen but clearly they can win games and win games without playing well.
"I have confidence that we can beat Middlesbrough and Sunderland and then it will be a different situation. There are still 12 games to go, you can't say anything is finished."
After the City draw, United old boy Mark Hughes summed up the situation, saying: "Manchester United will have to slip up now, and they do not do that very often.
"There are still a lot of games to go, but it is very much in their hands and they will have to lose three games now. You cannot see them doing that."