Leeds are 19th in the Premier League table with 19 points from 23 games and have been winless in the league since November.
The Whites sacked Jesse Marsch and appointed former Watford manager Gracia to keep them up in the league, describing his contract as “flexible”.
Shearer stated that Leeds’ performance against Everton at the weekend was terrible and added that the Yorkshire giants looked like a team running out of ideas.
The former Newcastle United striker believes that Gracia’s appointment was a reaction to Leeds’ hopeless on field performance at the weekend and stressed that other candidates for the job were not willing to accept a short-term contract.
Shearer admitted that Gracia has Premier League experience, but believes that it will be tough for the Spanish tactician to save Leeds from relegation.
“They had to do something and they had to do it quickly, because after their performance at the weekend against Everton, I watched them, they were hopeless”, Shearer said on the Football Daily podcast.
“They looked devoid of any ideas, they didn’t have a goal threat at all, so they had to go out and appoint someone.
“He has Premier League experience and he is available.
“He doesn’t demand a long contract that perhaps others who were looking at the job wanted.
“He has one job and that job is to try and keep them up – it is going to be very, very difficult.”
Leeds will take on Southampton at the weekend and it is still uncertain whether Gracia will be available in the dugout due to work permit issues.