Dalglish won eight league titles with Liverpool as a player and manager
BBC Sport football expert
I would have said give Roy Hodgson until the end of the season.
I don't think six months is long enough to turn things around. But there is no compassion in modern-day football and everything is all results-based.
To be fair to Roy, I think he inherited a poor squad of players by Liverpool's standards. Former manager Rafael Benitez signed not poor players, but not great players either. To win the Premier League and Champions League, you have to have great players.
Liverpool have a couple of great players but they need more. Roy knew he had a big job to do but unfortunately the buys he made have not played as well as he would have expected them to play.
Kenny is 60 in March and I think he feels he still has unfinished business at Liverpool
It's far easier to go from second to seventh than from seventh to second in the Premier League, so there's a lot of rebuilding to be done. But Kenny Dalglish is a great choice to take Liverpool through to the end of the season.
Obviously I am biased because he is a great friend of mine but you need someone who can galvanise the fans and get the players going. I have played under Kenny, he is Liverpool through and through.
A lot of the cynics would say that, because Kenny has been out of football management for some time, he will be out of touch with the with the game.
Well, I know him better than most and there's no doubt about it - Kenny is a football man. He knows about more players and more teams than anyone else I know. When it comes to naming any player in any league in England and most of Europe, Kenny knows them all.
I was talking to Stevie Nicol (former Liverpool team-mate now manager of MLS team New England Revolution), who said how he would love to be in the Old Trafford dressing room when Kenny gives his first team talk.
It will be passionate, informative - I don't think the players will know what will hit them! If there's one man who can get them going, it's Kenny, there's no doubt about that. It's a difficult job, but no better place to start than Manchester United away.
Kenny is clever, he would have weighed up all the options available to him when the offer to take over from Hodgson was on the table.
The chances of turning the situation around and becoming a success at Liverpool far outweigh the chances of taking them down not only in results but performances too. Liverpool still have one or two great players and confidence is a major factor.
Get a run of results going and the team start believing again - you never know what could happen. If Kenny turns things around and Liverpool do well, the club will have a situation because Kenny will want the job and quite rightly so.
It was 20 years ago in February that Dalglish resigned and it's getting close to that landmark. It's a massive job and a lot of people would say why would he want to do it?
Kenny is 60 in March and I think he feels he still has unfinished business at Liverpool.
By Mark Lawrenson
BBC Sport football expert
So Roy Hodgson has left Liverpool; I can't say I'm surprised.
I dare say it was inevitable with the way things have gone this season but I was one of those who thought he was a sensible appointment when he arrived from Fulham in the summer.
Given that the then chairman Martin Broughton was trying to sell the club and it needed a safe pair of hands, a more experienced man to handle it, I thought Roy would be just about right.
Unfortunately I have been surprised how the team have been under Roy. He was renowned for improving players at Fulham, coaching them and making them better but at Liverpool the opposite has happened.
Liverpool have gone backwards and the players he has brought in just haven't worked.
They are a team in decline with average players. It has only been when their trio of Pepe Reina, Fernando Torres and Steven Gerrard have played well that they have looked like winning.
The performances have been negative too often and, no disrespect to Wolves, but the 1-0 defeat by Mick McCarthy's team at Anfield was the final straw.
Looking at where the blame lies, any football club is only as strong as its players and over the last 18 months Liverpool have made huge mistakes, starting under Rafael Benitez where he left the side with only one top-quality striker after selling Craig Bellamy, Peter Crouch and Robbie Keane. It always is and always will be about players.
Looking at where the blame lies, any football club is only as strong as its players and over the last 18 months Liverpool have made huge mistakes
There will be an improvement under Kenny Dalglish because straight away you have got the crowd and that is so important.
Just look at the crowds they have been getting of late, they had the lowest New Year's Day gate at Anfield since 1983 and then the club didn't even take its full away allocation at Blackburn in the week.
It's an often overused phrase but Kenny really is a legend at Liverpool. He's the best player the club has ever had and also one of the greatest managers.
I consider Kenny a friend and I just hope that whatever happens from now until the end of the season doesn't sully his name. I don't want it to damage his reputation because ultimately you can only be as good as your worst player.
But you never know, he might get them playing well. If Liverpool end up in the Europa League, Kenny's reputation will be further enhanced.
Kenny loves the club and will take the job until the end of the season. In fact, probably once he has had a taste of it he might fancy it long term
Kenny loves the club and will take the job until the end of the season. In fact, probably once he has had a taste of it he might fancy it long term.
The good thing for Kenny is he can't really lose with his first match being the FA Cup game against Manchester United at Old Trafford. No one will expect Liverpool to win, so he can just get on with business after that.
It will take Liverpool a long time to get back into the top four, especially with Tottenham and Manchester City going so strongly.
Because of the dose of realism that has hit the place, the club is very flat, it has no edge at the moment and it used to be buzzing all the time.
The thing for Kenny will be to try and win as many games as possible between now and the end of the season, which is something I just don't think Roy always tried to do.
Alan Hansen was talking to BBC Sport's Gary Richardson, Mark Lawrenson was talking to BBC Sport's Marc Vesty
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