Owen, speaking to Spanish sports Marca, said: "We can't win the Champions League and the truth is we don't really mind who wins it now, however, we like to see English teams doing well.
"It is probably the best game you could dream up in the world of football at the moment; one of the best teams in England against the best team in Europe of the last few years.
"It's the best game of the round and whoever wins it will have a great chance of ending up as champions. Everyone talks about Real Madrid as the great favourites, you have to be a special player to get into that team.
"You see Madrid and they have fantastic players in every position, but even if they beat Manchester, they will still have to face some strong teams both from Spain and Italy."I think it is a perfect last eight for the Champions League and if Liverpool were there, they would be the strongest quarter-finals ever."
Despite his admiration for Madrid, Owen insists that he would be happy to end his career at Anfield.
"The truth is that I'm very happy at Liverpool. If you want to be one of the best players in the world, you have to play in England, Italy or Spain. I hope I can be here all of my life, but you never know because things can change in football."