Rangers beat Livingston 4-0 at Ibrox on Wednesday night to book a place in the last four of the competition this season.
With Celtic out of the cup competition, Michael Beale’s side are overwhelming favourites to reach the final and lift the trophy in the middle of December.
They will be taking on Hearts in the semi-final and Preston believes the Jambos should not be underestimated going into the game in the first week of November.
The former Hearts defender conceded that Rangers remain the favourites but stressed that the Glasgow giants are yet to convince in terms of their football this season.
He also pointed out that Hearts could be a better side by the time the game comes around if they get some of their injured stars back in the team.
Preston said on BBC Radio Scotland: “You have got to be in it to win it.
“Rangers are the favourites, which was before tonight, and after tonight they will still be the favourites but Hearts have a fighting chance.
“Rangers are not firing on all cylinders, now they may get players and Hearts may get players back.
“Craig Gordon could be back and Hearts will be a better side by then hopefully.”
Beale is under pressure to win the Scottish League Cup at Rangers this season due to Celtic’s early exit from the competition.
