When the Scot took over the Anfield reins in January, a European place looked a distant dream but some impressive results since then have propelled the club up the table.
Despite Saturday's 2-1 defeat at West Bromwich Albion, Dalglish's charges are just five points behind Tottenham Hotspur in the race for fifth place - and Harry Redknapp's side have still to visit Anfield.
High-five: Dalglish (right) has seen Liverpool climb the table since his arrival
And Dalglish believes his squad deserve credit for the way they have responded since he returned to the hotseat.
'I still don't think sixth place is the position we actually want to be in, but credit to the players because there have only been two transfers out and two in, and the lads that have got us to where we are deserve great credit for it.
'I don't think they could have done much more. I think they've done more than they possibly could.
'We've won some games maybe people thought we couldn't win and we've lost other games we thought we should win, but at the end of the day, as we keep saying, we will add up the points at the end of the season and see where we are.'
Revenge mission: Tottenham beat Liverpool 2-1 at White Hart Lane earlier this season
If both Manchester clubs finish in the Champions League places, sixth place will not yield a Europa League place and Liverpool will need to overhaul Spurs.
'If we were to finish sixth it would be an achievement for the players that they have got that far in such a short space of time but we just need to keep going and see what happens,' Dalglish added.
'The Tottenham game is our second to last match of the season but we are only looking as far ahead as Man City, because as we've always said the next game is the most important one and that's all we can concentrate on.
'Whatever happens between now and when we play Aston Villa, which is our last game, will dictate whether we are closer to Tottenham or further away.
'We will just put all our energy towards getting a result against Manchester City first.'
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?Explore more:People: Kenny Dalglish, Harry Redknapp Places: Liverpool, Manchester
Source: Daily Mail
Source: Daily Mail