Dorrans has been dogged by injury problems since Hodgson took charge at the Hawthorns nearly 12 months ago, most notably a long-term ankle setback suffered in training.
But the Scottish international is now fit and has made the most of opportunites opened up to him by injuries to Youssouf Mulumbu, Chris Brunt and Paul Scharner in recent weeks.
Albion head coach Hodgson said: "It's good to see that Graham Dorrans is getting better match by match.
"We're beginning to see the best of him because he is getting a run of games and that is benefitting his fitness.
"I've been at the club almost a year now and a large part of that time for Graham has been spoilt by injury.
"I'm now finding a new player who is a gifted footballer."
Hodgson is expected to ring the changes for Saturday's home FA Cup fourth round clash with Norwich, who won the recent Barclays Premier League clash at the Hawthorns.
He admitted: "I'm looking at the players who have been bearing the brunt of the opening 22 league games and maybe giving them a break at the weekend."
Scharner is unlikely to have recovered from his achilles injury in time to face the Canaries.