The 36-year-old has made 17 appearances since returning to the club on a free transfer last summer and talks over an extension to his one-year deal have begun.
Young has featured in several different positions under Gerrard and the boss sees his versatility as a huge asset.
He said: “You can’t underestimate or play down the fact someone can come in and do any kind of job on the pitch.
“Not many players can do that and have that versatility at that level, especially at his age. He is one of a few who are capable.
“You look at the likes James Milner, for example. They are a manager’s dream, really.
“Certain situations crop up, whether it be a suspension or an injury or a tactical change, where you need someone to do a certain type of job.
“It doesn’t matter whether it is on the left or the right or in the middle, whether it is forward or back, they carry it out and do exactly what it says on the tin. People need to give Ashley Young a lot of credit for being able to deliver that.”
Asked about talks over a contract extension for his former England team-mate, Gerrard replied: “There have been discussions. These decisions will happen when the time is right.
“I have made it nice and clear to Ash I want him to stay around. Ash seems to be be enjoying it. With any decision the player has to want to stay.
“He has to be happy, he obviously has to negotiate and have his people connect with the club. There are still a lot of things to discuss moving forward.
“There is no rush on it as far as I am concerned but at the same time I want to make it clear we are delighted with him and the job he has done for us so far.”