Current squad/team in terms of quality I think is about 7th-8th (thus they should go up a place or two in the near future). This is a considerable improvement on last season. But in saying this I think Megson is therefore right in his assessment, though it is a risk saying it in public for player morale. I can't imagine Kinsboro', McCauley, Weslowski, Hume & Clemence taking kindly to being described as 'much as a muchness'. The remaining players that have played in the first team so far however are all distinctly average - and only 3 out of those 5 are a really top notch.
The loan system, and the January window, should be an opportunity for M&M to notch up the quality of the squad. Until then, don't be suprised if Leicester hover around mid-table for a while. A surfeit of average players, a new squad & new manager all finding out about each other and trying to gell - all this should conspire to keep the club round about where it is for a while longer.