He said: "When you talk to him about players and football systems it's clear he has a lot of experience. That's good for the club and also for the young players coming through.
"We are changing things at the Academy, we are bringing in new ideas and new people but we're keeping the spirit and the heart of the club. Kenny has played for the club, he's managed the club, he's done everything. He's a fantastic signing."
Dalglish also told liverpoolfc.tv: People who come to the Academy should be delighted that Rafa is taking such an interest in the development of the young players.
"Everyone knows the most important team at the club is the first team and hopefully we can start producing players to challenge for a place in Rafa's plans. It won't happen overnight but I'm looking forward to working with Frank McParland and the rest of the Academy staff to do the best job I can."