With the (default) keyboard visible, press and hold the microphone button. Once the Settings icon appears above the microphone key, lift your finger off the screen. This will display a menu with two options: Input Languages and Google Keyboard Settings. Select the latter option for this purpose.
Scroll down the menu that follows, and tap on Autocorrection. On the following menu, you are able to set the level of autocorrection that the keyboard will apply to your text. The available options are: Off, Modest, Aggressive and Very Aggressive. Choose the one your prefer.