Can played the majority of the season on the right hand side of Reds boss Brendan Rodgers three back anddespite being signed as a central midfielder.
The Germany U21 international joined Liverpool at the start of the season from Bayer Leverkusen for a £9.75 million fee.
Lawrenson believes Can can be more effective if played further up the field.
“Yeah, I think Can’s a very capable player, wherever he plays,” Lawrenson told the Express.
“But you just feel with him, the further up the pitch he goes – another 15, 20 yards – I think he can have more effect on the team. The ball- playing and creativity.”
Can is expected to move into midfield next season following club captain Steven Gerrard’s departure.
The 21-year-old will return to Liverpool after a short break following the Germany U21 sides disastrous 5-0 defeat in the U21 Euro Championships to begin pre-season training.
Can provided one assist and scored one goal in 40 appearances for Liverpool in all competitors last season.