Souness, whose new book 'My Rangers: How I changed Scottish football for ever' was released this week, believes his old club have the psychological edge over Celtic following the two Old Firm victories by Derek McInnes' side in September.
Rangers beat Celtic 3-0 in the League Cup at Ibrox then won 1-0 at Celtic Park in the Premiership a week later and sit two points behind the champions in the table.
"They've now psychologically planted a seed in Celtic's heads that they are bigger, stronger and better than them in the last two games," he said.
"Celtic have left Ibrox after losing 3-0 in the first game thinking, 'how did that happen?' It didn't flatter Rangers.
"So, seven days later, if you're a Celtic supporter, player or on the staff you're thinking 'that won't happen again'. Well, it did happen again, and on your pitch - and the 1-0 did not flatter Rangers.
"So they've now got a psychological edge over Celtic, but that could be short-lived if Rangers were to lose a game against a team they're expected to beat.
"They've given themselves a platform. They're in a wonderful position, but they have to understand that, every team you play, it's the opposition's cup final. So Derek's got to remind them of that and they'll look like they've started to believe.
"Derek has been a player there and knows the Scottish scene. So he was well suited and a great choice. He did get off to a slow start, but in the last couple of games they've turned an enormous corner."