The Chelsea boss believes the change would help avoid some of the controversial incidents we witnessed last weekend
On-field officials are said to have been instructed to use pitchside screens sparingly, which is a stance Lampard thinks must change.
"Yes, I think it is part of VAR. I assumed when it came into the Premier League that would be the case," he told a news conference ahead of Chelsea's EFL Cup clash with Manchester United.
"I think we are at the point now where from my point of view I think they have to. It is difficult. I am not one to bang the drum.
"It is not easy and even with VAR there is a human element involved because they are the ones that are checking it and it is slightly opinionated.
"I think at the weekend we saw it flip slightly from the other way from what it had been already with some decisions being changed. Hopefully we find the right middle ground as soon as possible.
"I think seeing the monitor on the side of the pitch is the way forward."
Burnley manager Sean Dyche was highly critical of Hudson-Odoi's actions, but Lampard insisted it was not the youngster's intention to cheat.
"I said nothing to him. I didn't feel the need to. I asked him on the day of the game, after my press conference about what happened," Lampard added.
"He said he had a touch. Clearly when you see it back from behind he gets a touch on his back. I know it is light. I am not saying it is a definite penalty, but it is not a dive.
"I am not sure if Sean had watched it back from all the angles ahead of when he spoke, but it wasn't a dive as such. If that becomes a dive, then you will start analysing every bit of contact."