The Spain international has been linked with a move away from Anfield in recent months and has been closely linked with Real Madrid.
Fabregas said: “We have lost big players, but the boss knows what he is doing.
“The days of signing a new player aren’t finished.
“We need someone in the middle to make competition and make a difference, plus give us a new dimension.
“I think that is all we need. The rest is perfect.
“Xabi would be great. He’s experienced and can score goals. I’m sure the boss is aware of that fact.”