A stunning 3-0 victory for the Hornets at Vicarage Road also prevented the Reds from setting a new Premier League record of 19 wins in a row.
The Anfield outfit are, however, still 22 points clear at the top of the table and within touching distance of a first title triumph in 30 years.
As a result, little is being read into one slack showing, with Redknapp among those prepared to overlook a rare off day .
The former Reds midfielder told the Daily Mail : "When a good team lose a game of football, all we seem to want to do is pick their players apart and analyse the manager's decisions.
"We've all heard the phrase 'a bad day at the office' and sometimes that's all there is to it. It happens in everyday life. Lethargy creeps in. You rock up at work and for whatever reason, you don't put in the same shift you did previously.
"That was the case with Liverpool on Saturday. Of course they missed Joe Gomez and captain Jordan Henderson, and Virgil van Dijk -- the best defender in the world -- was among those who had a rare off day.
"But this victory was primarily down to the brilliance of Watford, hence why so many of [Nigel] Pearson's men dominate my team of the weekend.
"Too many sides have been scared to go after Liverpool, who have won 13 Premier League games by only one goal this season. Watford did, with aggressive front-foot football, and they got the win they deserved."
They will then return to Premier League action on Saturday with a home date against Bournemouth - with four victories all they require to secure the top-flight crown - before then switching attention to a Champions League defence and overturning a one-goal deficit against Atletico Madrid in the last 16 of that competition.