Liverpool captain Steven Gerrard has told Raheem Sterling that he should sign a new contract at Anfield as there is no better club for him to develop his career.
Sterling, who says he is keen to take up a more central attacking role, ended a run of 17 games without a goal when he scored twice in the 3-1 Capital One Cup win over Bournemouth on Wednesday.
The 20-year-old's current contract runs out in 2017, with Real Madrid and Bayern Munich are reported to be monitoring the situation. Sterling is yet to agree terms on a new deal, despite manager Brendan Rodgers revealing in October that the player's representatives were in talks with the club.
Gerrard told the Daily Telegraph: "I hope he signs a new contract because I think this club is perfect for him -- certainly for the next few years.
"He's going to play most weeks, the fans love him here. He can progress here and become a top, top player here so I hope the people around him give him the right advice because he should stay."
Gerrard, 34, likened the threat Sterling poses opponents to other quick attackers he had played alongside down the years at Anfield.
"He's great to watch, great to play with, he's got that pace," Gerrard, who himself is yet to commit to the club beyond the end of the current campaign, added. "When you look up he's always giving you an option and that's what I've thrived on throughout my career at Liverpool with the likes of Fernando Torres, Michael Owen.
"There's nothing better as a midfielder when you look up and see pace running in behind. I saw it on numerous occasions [against Bournemouth] and hopefully it will continue because it stretches teams and creates chances."
Sterling showed off his new cropped haircut at Bournemouth, and Gerrard joked that "no one recognised him when he came in."
He added: "He's knocked about 10 years off with that haircut!"