The England manager has faced criticism from some quarters for giving Grealish limited chances on the international stage since his long-awaited first call-up earlier this year.
Grealish impressed on his full debut against Wales last month but was then an unused substituted against Belgium and Denmark.
Southgate has plenty of options when it comes to the wide role he sees as Grealish’s best as the Aston Villa player bids to force his way into the England team for Euro 2020.
But he has said the Aston Villa captain, who notched a goal and assist in defeat to Southampton last weekend, is approaching the levels of England team-mates Sterling and Marcus Rashford.
“He is really starting to threaten the goal and be influential in the final third more or more which is great,” Southgate said.
“When I’ve talked to him about the next level for his game, when he looks at the numbers that Sterling and Rashford as wide players have contributed, he’s now starting to do that.
“I think that wasn’t necessarily the case at the end of last season, but in the last couple of games in particular the team haven’t done so well, but again Southampton the other day I thought his contribution with the ball for the team was outstanding. He’s going to get better.
“I think he’s continuing to do that and he’s moving further and further up our list of players. I think he’s got to just keep on that trajectory. He’s doing really well.”
One area Southgate doesn’t see too much competition is in goal. Despite his faltering form for Everton, Southgate has continued to back Jordan Pickford as his first-choice goalkeeper, while the England boss also revealed that he called the former Sunderland man following the furore around his challenge on Liverpool’s Virgil van Dijk which resulted in ruling the Dutchman out potentially for the season with an knee injury.
“It was after the Liverpool game and really I was just checking in,” Southgate said. “I recognise that there had been a very high-profile situation, and there was a lot of collateral fallout in a very public way, so I just felt that would be an appropriate call to see how he was and if I could help him in any way really.”