The 29-year-old's injury-ravaged Anfield career appeared to be in its final few months, following disquiet behind the scenes over a minimal return for a £70,000-a-week contract that runs out next summer.
The manager said: "He had 45 minutes with the reserves and has now added some time out in the middle with the first team, and to see him playing so well was really good.
"We were creating chances when he was on the pitch and that showed how he was contributing.
"You need to be 100 per cent every time you play and that has been difficult for Harry when he has sometimes been out for eight or 10 months.
"He is working with the physios and doing the right things. He must try to stay as fit as possible for the next few games.
"A new contract is a possibility and the way to make sure is by working hard and playing well, playing games in a row and playing at his level.
"Nobody has any doubt about the quality of Harry. He's a fantastic player.
"This is a crucial stage of his career. For his age and because he is finishing his contract. But I have always thought of him as a very good player who gives us options. Now it is up to him."
