Asked at a news conference on Friday if he felt Leicester, who lead United by one point at the top of the table, could win the title, Van Gaal responded: "It is possible, I think."
The United manager, who has won league titles in Germany, Spain and the Netherlands, said the spending power of Premier League clubs meant there was a less of a quality gap between the elite teams and their pursuers.
"Normally these kind of clubs (like Leicester) can be a long time competing, but normally at the end it's more difficult," Van Gaal said.
"But in England because of the quality of the teams, because every team has the money to buy players -- and they have bought players -- the difference in the Premier League between the clubs in level is not so high."
Van Gaal also warned of the threat to United posed by "nasty" record-seeking Leicester striker Jamie Vardy, who proved such a menace against them in last season's corresponding fixture which Leicester won 5-3.
Vardy could take his goalscoring run to 11 successive Premier League matches, surpassing former United striker Ruud van Nistelrooy's record of 10.
"He (Vardy) was already last year a very nasty player for us. He scores, he provoked a penalty and now he is scoring in a row 10 goals so now you are a great player," Van Gaal said.
The Dutchman drew parallels between Vardy and Arsenal great Dennis Bergkamp, who played under Van Gaal at Ajax.
"I only know, for example, Dennis Bergkamp as a player with me did the same with Ajax and that is not so easy," he said.
United travel to the King Power Stadium with Van Gaal under fire for his team's cautious performances.
But Van Gaal remains unworried about the criticism, responding: "We are still not lucky in finishing the chances. We are creating chances, and when we are not creating, then maybe I am worried."
(Reporting by Shravanth Vijayakumar, editing by Ian Chadband)
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