Villa came from behind to win 2-1 at Chelsea yesterday to leave sitting in third place, three points behind leaders Arsenal.
Shearer said on BBC Sport: "We're almost halfway through the season and it has to be said that Aston Villa are a genuine title contender. Do I think they'll win it?
"No , but that's purely because the depth in their squad just isn't there. But anything is possible under Unai Emery.
His game management is superb, as he demonstrated once again today with his three substitutions at Stamford Bridge.
"They weren't in the game in the first half, but the introduction of Ollie Watkins, Jadon Sancho and Amadou Onana was inspired.
"His team simply don't know when they'll be beaten again. Where would they be if they hadn't had such a terrible start?
"To think about where they are after not winning in five of this incredible club record-breaking run is incredible. And they're 10 points off fifth place, which will now make Emery very happy. What they're doing is fantastic for the Premier League."