After the departure of Fabio Capello this week Tottenham's Harry Redknapp has been installed as the favourite to take over.
But Dalglish, whose side go to Old Trafford on Saturday, thinks if the Football Association want a home-grown manager to take over they should go for the one with the best record.
"It doesn't really affect me, obviously the Scots boys are all right as they are settled with a manager doing a good job," said Dalglish, in reference to Scotland manager Craig Levein.
"England are on the look-out for another one and if you are looking for a manager I think you look for the one with the best record since the Premier League started of looking after English-British players and the success they have had.
"If I was in their position I'd be looking at the best one and if it's not available then start going down from there.
"Whether they want someone of their own nationality or the want the best it's up to them."
Dalglish said he was not referring to Redknapp, although "Harry would be fantastic".
When asked if he meant Ferguson Dalglish, with a smile, added "I never said that."
Ferguson had earlier laughed off the idea he could take over from Capello, saying "The FA have approached David Gill - I said I would let them know on April 1.
"I would do it. I would relegate them."
While his comments may have been in jest there is a deeper purpose behind them as Dalglish seeks to deflect attention away from Luis Suarez.
The Uruguay international is set for his first appearance against United, at the home of the Red Devils, since his eight-match ban for racially abusing Patrice Evra.
He is certain to get a hostile welcome but Dalglish, who has already moved to play down the clash by saying it is time to draw a line under the matter and Suarez will shake hands with Evra,
The Reds boss refused to speak about what treatment the striker can expect at Old Trafford on Saturday.
"We will comment on football," said Dalglish.
"We enjoy going there to play football and that is all we are going to concentrate on, we've covered every other aspect of what has to be covered.
"In the build-up to the FA Cup tie here (which Liverpool won 2-1) everyone played their part: both clubs, both sets of fans and the referee (Mark Halsey) was magnificent in the way he handled the game.
"If it is the same again then everyone will be happy."