Are you using the default keyboard or did you install swiftkey or swype?
"Settings - Language & input"
Here, under "Keyboard & Input Methods", you will find a list of all the keyboards installed on your phone(with a check mark besides the ones that are active). If you have not installed any keyboards, you may see only one keyboard that came as default for your phone.
To the extreme right of each keyboard, there is a 'slider' kind of icon. Click on this icon to goto the settings of the particular keyboard. You will have to adjust all your settings here.
To enable/disable predictive text input, change the settings for "Next-word suggestions", "Auto-correction" & "Show correction suggestions"