The Reds confirmed the signing of the midfielder from Bayern Munich on Friday following weeks of speculation this summer.
He adds another dimension to Jurgen Klopp’s side as Liverpool look to build following their Premier League success last season.
Liverpool's Prem rivals Tottenham are also set to strengthen with Gareth Bale expected to head back to Spurs imminently.
But Rangers boss Gerrard is more excited about the signing of Thiago rather than that of Bale back to Tottenham.
“I think it’s a fantastic coup for Tottenham, you’re talking about a world class individual but to be honest with you, I’m more excited about Thiago,” Gerrard said.
“He’s the one that’s got me butterflies in my stomach. My focus down there is Liverpool, not Tottenham.
“But fantastic coup, Gareth Bale is world class and you don’t want to see players like that sitting on the bench and frustrated and not playing.
“We want to see these players live and playing again. I’m sure he will add an awful lot to the Premier League.
“But the butterflies in my stomach will be for Thiago, sorry about that!"
Thiago put pen to paper on a long-term deal at Anfield, and can’t wait to get going at his new club.
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“I am excited not just to wait to play here, but also to train with my teammates, to get to know the coach and what he wants, how the team plays,” Thiago said.
“I want to help the guys if I can help them to be even better than they are, and I can be better than I am. It would be so nice and I hope for that.”