Holloway has utmost respect for the Scot but feels the Reds should have given Hodgson more time to make his mark.
Holloway said: "Good luck to Kenny Dalglish, he is a wonderful fella.
"The man is a living legend, he is someone I have admired from afar and for a long while.
"It'll be nice to try to beat him and that's what I'll be doing, but I am still lamenting a strange situation.
"I am sure Roy will get another job but I am sure he will be bitterly disappointed that a club the size of Liverpool didn't really give him the chance he hoped for.
"He waited a long time to climb up the ladder and unfortunately he has come off it really quickly. I don't think he deserved that.
"I just think it is very convenient to blame Roy Hodgson."
As to his successor, Holloway said: "I think he will give them some stability, that is what their club is built on.
"Their foundation was laid out years ago and Kenny was part of that as a player, a player/manager and a manager.
"It is a big ask because he has been out of the game a while, but if anyone can pull it off it is Kenny.
"I just hope it goes horribly wrong for him tomorrow - my club might gain then."