The Liverpool legend's appointment at the Saudi Arabian club was confirmed on Monday despite previously rejecting a move.
Gerrard has previous experience as a coach with Liverpool's youth sides before managing at Rangers and Aston Villa.
He left the latter in October after a poor run of form but has now been the latest addition to Saudi Arabia's influx of stars.
Simon Jordan was very critical of Gerrard's decision to go to Al Ettifaq, suggesting his money-based decision leave his reputation 'in the toilet'.
But Gerrard's former teammate, Murphy, doesn't believe it's quite as clear-cut as what Jordan is suggesting.
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"I spoke to him briefly when he was deciding the first time a few weeks ago," Murphy revealed on Drive. "He refused the job a couple of weeks ago...
"It's ludicrous in some ways to talk about it but he was wanting a football project that he knew he could have some sort of benefit from and actually learn something and actually improve his coaching and get back to work if you like.
"When he turned it down my instinct was that he's gone, 'There's an opportunity over here', which he thinks is going to be better for his long-term managerial career, which would make sense, forget finances.
"Because obviously, if you were to do a great job in the Championship for example and get a promotion, that's going to go on your CV. Whereas if you do well out in Saudi, it's kind of like [it doesn't mean anything], and if you do badly it doesn't really mean anything.
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"So, maybe that opportunity didn't materialise, maybe they did just throw more money at it. My understanding of Steven generally is that he wants to succeed in everything he does and although we're all tempted by extra dough, he's got plenty of dough."
Host Andy Goldstein said he believes that the money is the 'defining factor' in such a decision and not to benefit his managerial career.
But Murphy responded: "No, but what I would say is that if you don't have any other opportunities and you are not working and you're not practising your skill, you're not coaching anybody whether it'd be Liverpool U18s, whether it'd be in Saudi, wherever...
"If you're sat on your backside doing nothing, you're not learning anything, you're not honing your talents."
Gerrard's move to Al Ettifaq means he is now the second former Premier League manager to join the Saudi top flight.
Ex-Tottenham and Wolves boss Nuno Espirito Santo is in charge at the recently crowned Pro League champions Al Ittihad.