Philippe Coutinho finally sealed his move from Liverpool to Barcelona last night after the clubs agreed a £142m fee.
Transfer talk has now turned to who the Reds could sign in order to fill the void.
Leicester’s Riyad Mahrez and Monaco’s Thomas Lemar have been mooted as potential replacements, while Jurgen Klopp has already forked out £75m for Virgil van Dijk.
And Houghton, who made 153 league appearances for the Reds, believes fans need to stop panicking over finding a replacement for Coutinho.
Houghton says they can use past experience from when the club lost the likes of Luis Suarez and Steven Gerrard to help them recover from Coutinho’s loss.
“Over the years Liverpool have had Ian Rush, Kenny Dalglish, Steven Gerrard, Luis Suarez – and it’s the same thing,” Houghton told talkSPORT.
“’Oh we’ll never replace them.’ You can; of course you can.
“There’s different ways and means of doing it. It’ll be up to the others to start chipping in with more goals and more assists.
“But Liverpool are looking to build a squad, not only to get into the top four, but to win the league. And to do that there are other positions they have to strengthen.
“They’ve done that with Virgil van Dijk, who proved his worth last night.”
Houghton still thinks Liverpool need to improve three areas before the transfer window closes at the end of the month if they want to challenge for titles.
“I think they need a top quality goalkeeper, another centre-half and probably another central midfield player as well,” he added.
“So there’s areas they need to strengthen the squad and it’s not just about the attacking side of the game.
“It’s about the defensive side of the game that Liverpool have to strengthen as well.”