"We need to stay in the league obviously," said the manager, who lost two key players in Christian Benteke and Fabian Delph during the summer transfers.
"We know it's a tough ride ahead."
The clubs that avoid relegation this season will benefit from the record television rights deal that comes into effect from next season.
The 5.14 billion pounds agreement with Sky and BT Sports will boost even the lowest-ranked club's income by millions of pounds.
Sherwood has brought in nine players during the summer to plug the gaps in his squad, including former England and Manchester City defender Micah Richards and Ghana striker Jordan Ayew from French club Lorient.
"An improvement on last year is what we're looking for," Sherwood was quoted as saying by the Bournemouth Echo.
"It won't be hard to improve because we were the worst team left in the league. We need to consolidate and improve again."
Villa reached the final of the FA Cup last season where they lost to Arsenal, and while Sherwood feels "another couple of appearances at Wembley would be nice", the manager is wary of setting too many targets.
"There's a balance that we need to get. We've signed a lot of new players and lost some very important players to our team," the 46-year-old Sherwood added.
"It was a needs-must, we needed to bring in and hopefully we can get them to gel."
(Reporting By Simon Jennings in Bengaluru; editing by Sudipto Ganguly)
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