The 22-year-old, who was signed by Wolves in a £16 million deal from Porto two years ago, has been linked with Manchester United and Manchester City.
The £50m-rated midfielder has impressed for Wolves this season and played a key role in the club’s seventh-placed finish in the Premier League.
And Collymore believes the Portugal international could be the signing to move Liverpool forward.
‘If you’re champions of Europe, that in itself is a huge catch,’ Collymore told Stadium Astro.
‘Players from around Europe will have seen the atmosphere this year and the type of football.