The ex-Liverpool and England star has failed to show any qualities in his managerial career since he left Rangers, having won the Scottish Premiership there.
Gerrard struggled at Aston Villa, where Unai Emery has achieved far superior results, and is not shining in the Saudi Pro League with Al-Ettifaq either.
"Well, I suppose you have to make it count when you're on these shores, don't you?" Keown said on talkSPORT.
"So obviously Rangers, he did very well. Went to Villa and it was a huge disappointment.
“I had high hopes for Steven Gerrard to become a top manager. I think he's due another chance, Jim, when he comes back to the UK.
"I just felt that there was an empathy with him. There's an understanding of the game. He wants to be a manager so desperately. He's put in the hard miles. I know you're getting paid an absolute fortune, it's the other side of the world. He wants it to work.
"He looked like he was destined along with Frank Lampard. We were recently looking for an England manager. I think if those two would have trained on and done what we expected them to do, then they probably would be managing their country right now.
"But the other side of the coin is he could well lose his job now in Saudi Arabia. He has to decide what he wants next and how ambitious is he and how much does he believe in himself."