Spurs finished fourth in 2009/10 but missed out on Champions League qualification last season as Manchester City stormed to third place, joining established heavyweights Manchester United, Chelsea and Arsenal among the European elite.
City boss Roberto Mancini has continued strengthening his squad this summer as he looks to compete for top spot, while Liverpool have also been busy in the transfer market.
Sir Alex Ferguson recently suggested this season's title race could be the tightest in years and tipped the Reds to be a threat, leaving Redknapp to reflect on whether his side could be in the mix.
The Spurs manager has found it difficult to bring in new players this summer and he accepts that City's spending power has made him re-evaluate things.
"Imagine what their wages will be. It's incredible. They are all on ?100-grand-a-week plus. Wages have gone crazy," said Redknapp.
"It's gone beyond belief and made it really hard to compete for top players. If you want to be a top-four side, it's difficult because we can't pay those kind of wages.
"Our chairman Daniel Levy runs the club well, we get 36,000 fans, you're not going to put the club in hock. How do you compete with the Man Citys of this world?"
Speaking about the challenge for a top-five spot, Redknapp added: "Fergie didn't mention us. He stuck Liverpool in there this year and probably with what they have brought in, it's looking that way."
Source: Team Talk
Source: Team Talk