Gerrard has only recently come back into contention for the Reds following a groin operation which kept him on the sidelines for six months.
He has so far made only three appearances as a substitute, while he was left out of England's squad for the 2-2 draw with Montenegro in Euro 2012 qualifying last Friday.
Dalglish has been careful not to push the midfielder too hard during the early part of his comeback, but he has spent the international break working hard on his fitness.
Gerrard is now expected to be recalled to the starting XI for the visit of Manchester United on Saturday.
And Dalglish is delighted to have such a key player available once again as Liverpool look to mount a strong challenge in the Premier League this season.
"A fit Steven Gerrard strengthens this football club, no question. If you have Steven in your squad, it's going to raise the profile and standard," said Dalglish.
"We want to have a really strong squad - and him being in it makes it that much stronger."
The Reds could also be boosted by the return of Brazilian left-back Fabio Aurelio, who has regained full fitness following an injury layoff.
Like Dalglish, Aurelio believes Gerrard's return will significantly enhance Liverpool's chances of beating United.
"Of course I'm delighted to be fit again and we are all delighted that Stevie is back," Aurelio told LFC Magazine.
"He is the captain and a great player, and it is a massive help to the team to have him playing again.
Having played in this fixture eight times in his Liverpool career, Aurelio admits these clashes are always something special.
"Everyone looks forward to this game; the club, the players and the fans.
"After winning the derby [against Everton two weeks ago] we will go into it with a lot of confidence.
"It is always exciting."
And while the former Valencia man admits United are looking strong at the moment, he is confident in Liverpool's chances of claiming a win on Saturday.
"It seems like they have a new team with new players coming in during the summer.
"Like us, they all seem to have settled in well.
"They are in good form, so it will be difficult. But we will be confident."