The Sun says Liverpool top brass are considering offering the Kop legend his old position as club ambassador.
Dalglish was axed as manager at the end of last season following a disappointing league campaign, despite winning the Carling Cup and reaching the FA Cup final.
When Brendan Rodgers replaced Dalglish as boss, he was at pains to pay tribute to the Reds' greatest legend - and did not rule out the possibility of the Scot coming back.
Liverpool's American owners retain huge respect for King Kenny and know offering him a position at Anfield would cement their relationship with supporters.
Whether Dalglish would accept any such approach is open to debate.