Los Blancos head to Merseyside for a Champions League Group B encounter having won their last seven games in all competitions and coasted to back-to-back 5-0 victories.
Levante were the latest side to suffer at the hands of the European champions as the prolific Cristiano Ronaldo broke yet another record on Saturday.
The Portugal captain scored twice to become the first player to register 15 goals in the first eight matches of a Primera Division season, breaking a record which had stood since the 1943-44 campaign.
Ronaldo also scored in Champions League victories over Basel and Ludogorets, which have ensured Carlo Ancelotti's side are top of Group B.
Liverpool are third in the group after they were beaten by Basel at the start of October and Rodgers knows that they will be up against it when they face the Spanish giants.
"Right now Madrid are a team with a level of performance I haven't seen in years," he told AS. "They have it all. Great experience, great players, speed, individual technique. It's a fantastic squad with a wonderful coach in Carlo Ancelotti, a nice guy who also knows how to improve players.
"When there's an open field there's no-one better than Madrid in the world at counterattacks. Cristiano Ronaldo and Gareth Bale could be in the Olympics with their speed over 100 metres."
Ronaldo will be expecting a hostile reception from Liverpool fans thanks to his successful spell with their arch-rivals, Manchester United, but Rodgers knows that the European champions are by no means reliant on the Portuguese.
"He's a player off the charts. His evolution in recent years, the way he has become a goalscorer, has been amazing," said the Northern Irishman. "We need to know how to stop him but there is danger in other parts of the pitch.
"Luka Modric and Toni Kroos are two midfielders with great technique who can play short or long."
Wales forward Bale is not expected to feature at Anfield due to a hip injury.
Liverpool head into the game on the back of a dramatic 3-2 victory against QPR on Sunday, in which they needed two own-goals to secure all three points.
Ancelotti coached a AC Milan side who were consigned to a remarkable defeat against Liverpool in the Champions League final in Istanbul back in 2005.
The Italian will no doubt be reminded of that when he attempts to maintain Madrid's 100 per cent record in this year's competition, as they strive to become the first team to defend the Champions League title.
Liverpool, who have won all three of their competitive matches against Los Blancos, will once again be without England striker Daniel Sturridge due to a calf injury and Mamadou Sakho (thigh) remains a doubt.
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