The Reds have failed to keep a clean sheet in their last six matches in all competitions and were held to a 1-1 draw by Spartak Moscow in the Champions League on 26 September, with goalkeeper Loris Karius partially at fault for Spartak's goal.
Schmeichel said Liverpool should be more concerned over fixing their back four rather than lavishing praise on their attacking quartet of Sadio Mane, Philippe Coutinho, Roberto Firmino and Mohamed Salah.
"It's so obvious what the problem is – we talk about the fab four, we should be talking about the flat four," the legendary goalkeeper told Sky Sports.
"The back four just doesn't work and the goalkeeper situation is very confusing.
"You can't win anything significant with an unbalanced team – you need to have equal quality up front and at the back."
Former Liverpool centre-back Phil Thompson said Karius should have done better to save Fernando's free-kick against Spartak Moscow.
"They've had two attempts, one from the free-kick which they scored, and one from another shot which Karius blocked. But for the goal, the goalkeeper should do much better," he told Sky Sports.
"Fernando puts it over the wall, yes with pace, but it's not even at the side, it has gone sort of four yards inside the post. I think he moves his feet far too late, so you'd have to say it's a goalkeeping error yet again."
Schmeichel criticised Klopp for not addressing his side's defensive problems during the summer transfer window.
"I can't believe Jurgen Klopp has not addressed the clear problem," Schmeichel said. "And still they think they can win the Premier League this season.
"They still believe they are in that bracket. I think they are far away as they will concede far too many goals. They'll score lots of goals too and win some games 4-0 like they did against Arsenal – but they are also a team that can lose 4-0."
Liverpool return to Premier League action with a trip to Newcastle United on 1 October.