"I think we should be realistic about our expectations for this year," the Briton, who has stepped back from his full time role as technical supremo at the former champions, said in an interview published by Red Bull.
"This year will really be about continuing to try to move forward and reduce the (power) deficit that we suffered at times last year.
"If we can manage the odd win, as we did last year, then that would be fantastic. But we can't count on it. I think it's really a season that will be very much about trying to extract the most we can and build on it for the future."
Red Bull won three races last year, to 16 for Mercedes, and relinquished both drivers' and constructors' titles they had held for four years in a row.
The 2014 season featured the introduction of a new V6 turbo hybrid power unit, with Mercedes emerging as the pick of the field while Red Bull's partners Renault struggled with reliability and performance.
Renault are hopeful of narrowing a gap that Newey estimated at 60 horsepower at the end of last season, but Mercedes have also been working hard on their engine.
"The pace of development, just because of the technology, is slower than we're able to work at on the chassis side," said Newey.
"They (Renault) have a challenge ahead, which I'm confident they will meet, but they need time to achieve that."
Red Bull finished second overall last season with Australian Daniel Ricciardo and four times champion Sebastian Vettel, who has now joined Ferrari. Russian Daniil Kvyat has joined as the German's replacement.
The season starts in Australia on March 15.
(Reporting by Alan Baldwin, editing by Pritha Sarkar)
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