Holloway also believes that Roy Hodgson, who Dalglish replaced following an unsuccessful six-month stint in charge, was always on the back foot because of Dalglish's presence as an ambassador for the Reds.
He said: "The whole thing about Liverpool was that Kenny was given the job of finding someone, then said he wanted it himself.
"I'm not sure that it was a good job for anyone else to take after that. Maybe Jose Mourinho could have dealt with it, but I'm not sure about anyone else.
"Has Kenny ever really left? If ever there was a skeleton in the closet, it's Kenny."