The Reds have only signed one player in the summer transfer window so far following the arrival of Dutch teenager Sepp van der Berg.
Liverpool FC won the Champions League last month thanks to a 2-0 victory over their bitter Premier League rivals Tottenham Hotspur in Madrid.
The Reds finished in second place in the Premier League table and a point adrift of champions Manchester City despite losing just one game.
The club’s manager Jurgen Klopp will be eager to build his squad into one capable of beating the Citizens to the Premier League title next term.
However, former Reds defender Nicol doesn’t believe Lallana have a future at Liverpool FC following a bit-part role in the 2018-19 season.
“I don’t think Lallana is good enough for where Liverpool are now,” Nicol told ESPN FC.
“I think when he starts or when he comes on, there’s a clear drop-off. That’s not where Liverpool need to be.
“Liverpool need to be filling the squad out with players who are going to push the starting eleven players.
“For me Lallana doesn’t push anyone in the starting eleven.”
Liverpool FC signed Lallana in a £25m deal from Premier League rivals Southampton in the 2014 summer transfer window under Brendan Rodgers.
The former Saints captain scored 21 times in 155 games in all competitions throughout his five-year spell at the Merseyside outfit.
Lallana’s only trophy is the Champions League since his move to Liverpool FC, although he has finished as a runner up in the Europa League and the League Cup.
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