Benitez left the Anfield club in the summer and took over at Inter Milan, but he has since been sacked by them.
"It will be much better with Kenny because he knows the club and what the fans want," Benitez told BBC 5 live.
Dalglish racked up eight league titles as a player and a manager with Liverpool between 1977 and 1991.
"He can talk with the players and they will feel and understand what it means to be a Liverpool player," added Benitez.
"I think that Kenny has been a very good appointment and, hopefully, it will be successful."