The Blues have made their return to Europe’s elite club competition under Antonio Conte after missing out on a spot in the tournament last season following their 10th-placed finish in 2015-16.
Chelsea did not have the distraction of European football last season as they focused purely on domestic affairs and won the Premier League title.
The west London side have not won the prestigious competition since Lampard was still playing for Chelsea back in 2012.
However, Lampard feels that the Blues are well-equipped to challenge for the Champions League title this season.
Lampard told the Evening Standard: “Everyone is aware, including coach Antonio Conte, that it will be much harder to fight on both fronts, at home and in Europe, this season.
“But I think they have the potential to go all the way. Defensively, Chelsea are as good as anybody.”
He added: “When I look at the other English teams in the Champions League, some of them will struggle at the back, whereas Chelsea have a great base.
“After that it comes down to the attacking players being in form, so Chelsea have a lot to be optimistic about.”
Chelsea, who lost the FA Cup final to the Gunners back in May, return to Premier League action on Sunday afternoon with a crunch clash against Arsenal at Stamford Bridge.
The Blues have won their last three games in the Premier League to leave them in third place in the table.
They have notched up victories over Tottenham, Everton and Leicester to get their season back on track after their shock 3-2 loss to Burnley on the opening weekend of the new campaign.
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