Ahead of the first Old Firm clash of the season on Sunday at Celtic Park, the former Celtic captain and manager noted the improvements at the club under new boss Steven Gerrard.
Rangers are on the verge of qualifying for the group stages of the Europa League, while they are yet to lose a league game despite dropping points at Aberdeen and Motherwell.
“Steven has made significant strides already in the short space he’s been there”, he said on Sky Sports’ The Debate show. “They’re unbeaten, they’ve got a big game Thursday night in Russia, where they can qualify for the Europa (League) group stages.
“Rangers were not very good to say the least last season.
“What Steven has done is build a really good spine of the team in McGregor, experience, Goldson and Katic came in at centre-half, Scott Arfield has come in and Ryan Jack’s had a good start to the season. And he’s brought in Kyle Lafferty who knows this fixture very, very well.”
However, Lennon feels his old side are still the side to beat was full of praise for Celtic boss Brendan Rodgers.
He said: “Brendan has done a remarkable job in terms of they won the treble in his first year, went the whole season unbeaten, won another treble last year. Celtic have gone out of the Champions League which is a blow but they still have quality right through the team.
“It’s Celtic at home so you have got to say they will be strong favourites but certainly the gap in terms of players and quality of players on the pitch is definitely closing.”
He added: “It will be between the big two. They have got the big resources and strength in depth. I can’t see anyone past Celtic. The way Brendan has handled things over the two years he’s been there has been fantastic.”