The Arsenal legend tore into Mohamed Salah, Virgil van Dijk, Trent Alexander-Arnold and Joe Gomez with Jurgen Klopp's side in ninth spot.
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The Merseyside outfit have won just two out of their opening seven Premier League matches and are yet to win on the road in the top-flight this term.
They face a rampant Arsenal side in north London on Sunday, with Mikel Arteta's men top of the table having picked up 21 points out of a possible 24 on offer.
And Petit, who won the double with Arsenal and the World Cup with France in 1998, believes victory for the Gunners will effectively end Liverpool's title chances.
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Speaking to Compare.bet, the 52-year-old said: "When you look at Liverpool at the moment, they look so sloppy, terrible. Something has been broken in this team.
"This could be the last chance for Liverpool to make something of this season, if they lose to Arsenal, they will be 14 points behind after nine games. It's a huge gap.
"There are so many weaknesses. There are so many things that are not working with Liverpool. There is something that's broken with this team.
"Mentally, they are not the same unit they have been for the last four or five years. Physically as well.
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"I think with the fact [Sadio] Mane has gone, you can see something is missing up front as well. Salah is a shadow of himself at the moment.
"The midfield don't control the tempo anymore, they are not playing with character and personality. And in defence, my God. So many individual and collective mistakes, easily avoidable mistakes.
"They are not the same players they used to be. They don't have the same concentration, the anger to beat the other team, to hurt them, to put pressure on them.
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"They don't run together anymore. They used to run together, like a unit, and the opponent would be scared of them."
He added: "Sometimes during this season I have felt embarrassed to watch Alexander-Arnold, Van Dijk and Gomez when he was playing. So many mistakes.
"[Gabriel] Martinelli is very confident, and every time he runs with the ball, he is so quick, so fast, and that's exactly what Trent doesn't like. To be one-on-one with a player that can hurt him.
"I don't know how Trent is going to defend him, but the problem with Liverpool's defence isn't only on him.
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"It's the whole defence, and when I say that, I mean the whole team, because they start from the front.
"They are not doing the same job all over the pitch that they used to, and it means the team is too stretched. I think Trent is very good with the ball, but he's one of the worst without it."