The Frenchman spent seven years with the Gunners and came up against the dyed-in-the-wool Liverpudlian in the Premier League on countless occasions.
Henry told Liverpool's official website: "When Carragher retires, it will be a sad day for any Liverpool fan and for anyone who likes the game.
"The memory that I have of him is someone who was loyal and committed. You will always remember him as a Liverpool player because that's the only team he played for.
"I have had incredible battles against him. I lost some and I won some but they were always fair and always hard. He's a competitor.
"For me, he will go down as one of the top five. If you talk about how long he has played for Liverpool and what he won there and what type of player he was, he will go down in history as one of the greatest in the history of the league."