Mauricio Pochettino's Saints have enjoyed a fine start to the Premier League season, and sit sixth in the table ahead of Swansea's trip to St Mary's on Sunday.
As a result, the likes of goalkeeper Artur Boruc and midfielder Victor Wanyama have been bold enough to target a top-four finish and a place among Europe's elite for the south-coast outfit.
Laudrup admires their bullishness, but feels Saints should set their sights a little lower.
He said: "It's always good to be ambitious. But, of course, I think there are better teams than that.
"I like the team they have. It's a team who can be in the top 10.
"Those spots - eight, nine and 10 - are the maximum for them and us in terms of what we can go for.
"I still believe you have all the big sides. The Manchester clubs, Chelsea, Arsenal, Tottenham, Liverpool and Everton. That's seven.
"In my opinion, the rest of us play for eighth position and down."
Swansea narrowly missed out on the 'best of the rest' tag to West Brom last season, finishing ninth as the Baggies secured eighth spot.
Laudrup would like another top-10 finish, but is firstly focused on getting points on the board after facing Manchester United, Tottenham, Liverpool and Arsenal during the first half dozen league games of the campaign.
"We have to take things step by step," he said.
"We've had a very difficult start. We've played some of the top four and the big teams in the first six games.
"But this is a good test for us on Sunday because Southampton is absolutely one of the best teams of the rest.
"It will be a tough test for us."
Swansea are balancing domestic duties with European competition this term, and Thursday's 1-0 win over St Gallen put them clear at the top of Europa League Group A.
Laudrup hopes the additional preparation time afforded by having played at home, as opposed to on the road, in midweek can help his side on Sunday.
He said: "It is completely different playing home in Europe, as on Friday morning we are in Swansea instead of travelling and coming home at 6am, feeling tired with the time difference as well.
"It is a huge difference from playing away on Thursday and then home on the Sunday."