Coady joined the Toffees on a season-long loan this summer, having lost his place in the team at Wolves under Bruno Lage.
The 29-year-old quickly established himself in Frank Lampard’s starting line-up and has started all eight Premier League games since his arrival.
Gray revealed that everybody told him that Coady was not suitable for a back four as he played the majority of the matches in a back three at Wolves.
The ex-Everton star is of the view that Lampard took the right decision to move to a back four with Coady and believes the Toffees have stopped conceding goals due to that decision.
Gray further added that he is pleased to see Coady proving his doubters wrong and showing that he can play easily in a back four formation.
“Everyone told me that Conor Coady can’t play in a four”, Gray said on the Keys and Gray podcast.
“He is not quick enough. He is not mobile enough. He will get caught out.
“That was the school of thought that followed Conor Coady.
“At Wolves he played in a three, pretty much every game he played for them.
“Then he came here and started in a three and Frank changed that and I am so pleased that he has and I don’t think it is a coincidence that Everton’s results have got better.
“They haven’t conceded goals.
“They have one of the best defences in the league, if not the best.
“It was a great decision and it just shows that Conor Coady can quite easily play in any back four.”
Everton have successfully managed to keep three clean sheets in their last seven games with Coady in their heart of defence.
