Until Klopp arrived at Anfield in 2015, Liverpool were in danger of being left behind by big-spending Manchester City and Chelsea.
But the Liverpool manager has revived the club in stunning style, culminating in the first league championship since Anfield icon Dalglish last led the Reds to the title in 1990.
“The last few years since Jurgen came in has been very positive the whole way through. He has been fantastic,” Dalglish told BT Sport.
“He epitomises everything that Liverpool Football Club stands for. He appreciates it, he respects everyone who works at he club.
“They have all got his respect. Whatever they have got they deserve it, it’s not just a one off because last year they came within a point of it.
“This year they have only lost one, they have drawn two, they have won a Club World championship, they won the Champions League last year as well.”
Dalglish admitted Liverpool’s long title drought was unthinkable when he and his team, featuring stars like Ian Rush and John Barnes, lifted the silverware three decades ago.
Asked if he expected the wait to be so long, Dalglish said: “No, I think if you did you would have been arrested and sectioned. You don’t know, sometimes things happen.”
– ‘Onwards and upwards’ –
Having ended City’s two-year reign as champions, Dalglish believes Liverpool can reign for a sustained period.
“Onwards and upwards. I think we’ve got a lot more happy days to look forward to as long as Jurgen is there,” he said.
“You know how much it means. By the way it’s hard work to dominate the English league when you’ve got quality like Manchester City.
“Manchester City’s problems have always been at the back I think. Losing Vincent Kompany, they haven’t effectively replaced him.
“They have some fantastic players but they will lose David Silva as well. I don’t think they will dominate like they have in the last two years.”
Widely regarded as the club’s greatest player, Dalglish won three league titles during his first spell as Liverpool boss from 1985 to 1991.
Dalglish believes there are similarities between his 1990 champions and Klopp’s group, who also won the Champions League last season and the Club World Cup this term.
“For me both teams are exactly the same. There is no arrogance, no big heads, nobody thinking they are better than anybody else,” he said.
“They are all very humane. You hear stories of them paying for everybody’s petrol, they seem humble.”
Dalglish did his interview with BT Sport decked out in a Liverpool scarf and holding a glass of champagne.
“I remember Bob Paisley said once after winning the European Cup in Rome, he never had a drink because he wanted to remember the occasion. Well, Bob, I never took your advice!” he said as he raised his glass to toast Klopp and his players.