United got back on track with a 1-0 win over rivals Liverpool in the League Cup on Wednesday but have suffered league defeats by Brendan Rodgers' side and rivals Manchester City.
"I am not confident we are going to retain the title," Schmeichel said.
"We know we will recover, though this season, with all the changes, is not going to end with the championship."
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We know we are going to recover
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Peter Schmeichel
Manchester United 1991-99
"I can accept us not winning the title as long as we are competing for it. It is quite competitive this year. If we are not there or thereabouts then I would be worried," added Schmeichel, who won five Premier League trophies with United.
"I think we will be, though, because that is what sort of a club Manchester United is."
The ex-Denmark international kept goal at Old Trafford for eight successful years after Sir Alex Ferguson signed him from Brondby in 1991 and he suggests that it will take new manager David Moyes time to challenge for honours.
But the Dane does not anticipate any major disasters this season, despite a period of change for the champions.
Schmeichel's United honours
Five Premier League trophies
Three FA Cups
One League Cup
Four FA Charity Shields
Uefa Champions League
Uefa Super Cup
Speaking at a National Football Museum Hall of Fame event, Schmeichel added: "We know we are going to be there or thereabouts again. That is what we do, that is what Manchester United is all about.
"It is not something we take lightly and we know we need to work hard as that is part and parcel of being at Manchester United."
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