He suggested the Bills are already on the same level as the Miami Dolphins.
Gailey spoke at a luncheon Tuesday at the Adam's Mark hotel and gave his thoughts on where the Bills stand in the AFC East.
"I like the challenge of our division," Gailey told the Monday Quarterback Club. "If you can go play well in our division, then you can compete for the whole thing.
"The old saying, 'If you want to be the best you've got to beat the best,' that's where we are. We have some of the best teams in football in our division. We've got to go beat the best. That's our objective. You get a quick read on where you are as a football team by playing those guys twice a year."
The Bills have finished in last place each of the past three seasons and haven't made the playoffs since the 1999 season.
In that stretch, the Patriots have won three Super Bowls and at least tied for the division's best record every year.
"If you look at New England, you've got to play unbelievable defense against them," Gailey said. "They can move the ball just about on anybody. They had a bad day against the Jets in the playoff game, but when [Tom] Brady's healthy and in top form, they're good. Their offensive line is good. They've played together for quite a while. They create problems for you with all that they do on offense.
"Defensively, they were probably down a little this year. They gave up more yards than they had in years past. That probably -- I don't know this for sure -- probably will be their focus coming up in the next year, how to improve their defense."
The Bills obviously are behind the Jets, too. The Jets have advanced to the AFC Championship Game two years in a row.
"The Jets are strong," Gailey said. "They're a physical football team. We'll have to fight to get to where they are. I think we can. I don't think it's that far away. ... They've got some good, veteran players. You just have to accept that challenge each time you play them."
But Gailey wasn't as deferential in regard to the Dolphins, who won the AFC East title in 2008 but have posted consecutive 7-9 seasons. The Bills split with them last year, winning at Sun Life Stadium.
"Miami, we could've had them at home," Gailey said. "We did go down there and get them. I think we have got a chance to match up with them pretty good in the years to come. I like where our team is heading."