Andre Villas-Boas's side are currently fourth in the league table with 20 points from 10 matches, five points behind leaders Arsenal.
Gareth Bale's departure from White Hart Lane in the summer was expected by many to hit Spurs hard, but Townsend insists that the Welsh winger's exit has made the London outfit a better team who can challenge for the title.
"Last season, Gareth Bale was the star; this season we have a team of stars," the 22-year-old told Standard Sport.
"We made seven top signings in the summer and we're more well-rounded. We can play two sides - one in the league and then make eight or nine changes for a cup game.
"Is it realistic to aim for the title? I can't see why not. We're in touching distance of the top and we're still fighting for that top space.
"Four of the top six changed manager in the summer but we've kept continuity and that gives us a massive chance this year.
"Last season, we looked to Gareth a lot, but this year we've got great depth in our squad. The squad will come into it more between January and March and hopefully that depth will give us the upper hand."
Tottenham are level on points with Chelsea and Liverpool, who are second and third respectively, while both Manchester City and Manchester United are below them in the table.
Spurs have not won the English top-flight title since 1961 but Townsend believes that he and his teammates need to maintain self-conviction to create history this campaign.
"We're making ourselves hard to beat and the main thing this year is that we're a team," added the England international.
"We've just got to have the belief to stay up there. We've made a good start and now it's up to us to continue that and not let the expectation get to us.
"Arsenal are in fantastic form but I'm sure the Manchester clubs and Chelsea will hit a purple patch, and it's up to us to stay with them."