The Reds were beaten 4-0 by Tottenham yesterday and Dalglish knows that his side will have to improve dramatically to get past that result.
Gerrard will soon be back for his first game since March with a cameo in Wednesday's Carling Cup clash with Birmingham City a likely scenario but Dalglish has warned fans not to think that things will change straight away.
"It's natural everyone will chase Stevie, especially after we lost 4-0," said Dalglish.
"He has done fantastically well to get where he is. We will monitor his fitness, we will see how it goes, and then we will decide between ourselves when he is fit to play.
"But we have to look at ourselves. We know there is plenty of room for improvement after that [defeat].
"We have to correct the mistakes we made, improve on it and try to make sure it doesn't happen again.
"That is all we are going to concentrate on.
"We have had good days and we will have a lot more coming but that doesn't mean we dismiss a performance like that.
"It doesn't mean we go away and don't correct what we have done and take it for granted.
"When we played well we went out and worked hard to make it better and we'll do exactly the same."