McMahon, who was part of the last Reds side to win the title in 1990, believes Rafael Benitez has now assembled a squad capable of winning number 19.
"They went out in the last couple of months and played with a lot of confidence," said the former midfielder.
"As a result they've gone at teams, so it's a shame they just fell short.
"They won nothing but you can see an improvement and you can see things happening. The fans should be confident for next year - I'm confident.
"If we start next year like we finished this one, we've got a real chance of winning the league."