Rangers were comfortably beaten 2-0 on Merseyside last week and will host Liverpool in the fourth game of their Champions League group stage on Wednesday night.
The Reds dominated the game at home and Rangers were lambasted for the lack of ambition they showed at Anfield.
Miller stressed that Rangers will have to defend well again at Ibrox as Liverpool will create chances and they will need Allan McGregor at his best again in between the sticks.
He feels Rangers did defend competently for most parts of the game at Anfield, but insisted that they need to show more ambition when they get the ball at Ibrox on Wednesday night.
The Rangers legend believes the Scottish giants were timid when they got the ball against Liverpool last week and need to post more of an attacking threat at home.
Miller said on Sky Sports Scotland: “You don’t have to play one way or the other.
“When you are defending you are going to have to defend well.
“Allan McGregor, if he is playing, he will have to have another good night because Liverpool are a world-class team with some wonderful footballers.
“They are going to create chances so at that moment Allan will have to pull out a few saves and defenders have to head, block and tackle as that’s part and parcel of the game.
“I think Rangers didn’t do so badly in the defensive side of things last week and Liverpool will always get chances because they are a really good team.
“But it is when they got the ball, there was an acceptance that we are not good enough to be at this level.
“They were kind of just punting long and Liverpool regained and came back and built the next attack.
“That’s something Rangers need to be far better at.
“Yes, they will have to defend well and you can defend well like they did last week for long periods but you just need to carry far more of a threat when they get the ball.”
Rangers are coming into the Champions League clash on the back of a convincing 4-0 win over St. Mirren at the weekend.
