The 25-year-old has been linked with a move to cash-rich French side Paris Saint-Germain in recent weeks, but the Uruguayan forward committed his immediate future to Liverpool on Monday.
“It might be bad news for other Premier League teams but it is encouraging for us,” Dalglish told Liverpool’s website.
“Luis has always said he is happy here, so it’s great for everyone who supports Liverpool.
“I don’t think he has been anything other than a threat to the opposition. We aren’t going to analyse every game he has played in, but he’s always been a threat.
“We have been delighted with him since he has been here. And we are delighted with the Luis’ comments.
“He scored a fantastic goal against Stoke City, it was quite similar to the one he scored at Stoke in the Carling Cup although he was a bit more wide.
“Luis has made a contribution every time he has stepped out on to the football pitch, whether it was on Sunday or a month ago. He scores goals and creates goals.
“It’s great news that he is happy. We are delighted with his statement and the content of it. It’s good news for everyone who supports the club.”
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