Dunne came in for criticism from the French manager and was disciplined along with James Collins after an incident involving coaching staff at a health spa in March.
It appeared his days may have been numbered, but the arrival of Alex McLeish as Houllier's successor has given Dunne a new lease of life - one he never expected to have.
"I probably would have left if Houllier had stayed," the Republic of Ireland international told the Birmingham Mail.
"But once there was a new manager coming in, I knew I had a chance to stay.
"I spoke with him when he took over and he said he heard of stuff that happened at Villa last year.
"He said if we recaptured our form, he wanted myself and James to be his main centre-backs. That gave us confidence right away."
Despite his return to form, though, Dunne admits he would like to emulate Robbie Keane and end his career in the United States.
Keane has linked up with David Beckham at LA Galaxy and Dunne says a similar move would appeal eventually.
He added: "I think it would be nice to live the lifestyle out there. If the opportunity came at 34-35, I'd definitely take it."