Carlo Ancelotti's Everton can become "the next proper challenger" to Liverpool in the Premier League, says Reds manager Jurgen Klopp.

The Toffees top the table with four wins from four under the Italian, who was appointed last December.

They host champions Liverpool in the Merseyside derby on Saturday.

"What I think about Carlo Ancelloti was never a secret. I couldn't respect him more. He's a wonderful human being," Klopp said.

"When I heard he was going to sign for Everton I thought 'Uhhh, the next proper challenger in line'.

"They did the perfect business in the summer. They found exactly the players that they needed to improve an already pretty good football team.

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