The Gunners currently sit top of the table ahead of facing Crystal Palace this weekend.
Carragher wrote in the Telegraph: "Arsenal came into this season worried about Liverpool being the major obstacle to ending a 21-year title wait. Now their biggest fear might be Erling Haaland.
"Where Arsenal have the best squad among the contenders and Liverpool must fix well-documented issues, Manchester City have the most influential player and a dynamic attacker.
"The Norwegian is the biggest reason why Pep Guardiola's side have a great chance of reclaiming their crown. Without him, City's most realistic target would be finishing in the top four.
"Haaland is so good he can be the difference every time he plays. He is the most lethal finisher of this generation, which is why he is already worthy of comparison with past legends."