Frank Lampard’s side are third in the Premier League – two points behind joint-leaders Tottenham and Liverpool – ahead of Saturday’s clash against Leeds United.
The Blues finished fourth last season but appear set for a genuine title charge following a summer in which they signed Timo Werner, Kai Havertz, Hakim Ziyech, Ben Chilwell and Thiago Silva.
But former England star Hargreaves believes Chelsea are still a way off a title challenge and says Liverpool and Man City will soon pull away from their rivals.
Asked whether Chelsea are title contenders this season, Hargreaves told Premier League productions: ‘I don’t think so.
‘I like Chelsea and I like what Frank Lampard is building, but I just think Liverpool and Manchester City are above them.
‘I don’t think it will even be close. I think it will be those two first and second and a bunch of other teams after that.
‘Frank has finally settled on this team but those teams [Liverpool and Man City] have been doing it for years and they both know their best teams.
‘Chelsea are probably the third best team in England but I don’t think they’re good enough or consistent enough to compete with the two teams who have been doing it for far longer and have better players.’
On Saturday evening, Lampard’s Chelsea face Leeds, who are currently 12th in the Premier League.