Sterling has five goals from his last 10 games for Liverpool - coinciding with an upturn in results at the Anfield club.
He once again started in a central forward position against Bolton in the FA Cup tonight, in the absence of recognised strikers Mario Balotelli, Daniel Sturridge, Rickie Lambert and Fabio Borini.
And Neville believes Sterling is revelling in his new role and that the team should start to mould their tactics around him.
"I thought Raheem Sterling started the season poorly," Neville said on BBC One.
"But there's been a change in the last month in the speed that Liverpool have played at and I think it's coincided with Sterling playing more centrally.
"It suits him a lot better and everything seems to come through him."