Allen is now fully fit after shoulder and hamstring problems.
Pascoe told Liverpoolfc.com: "Joe is a great talent, a great player. We haven't seen the best of Joe yet; he's had a couple of injuries.
"He had his shoulder last year, then a hamstring - he had to battle through that. I'm sure, when he has come through all these now, we'll see the best of Joe.
"He's a great manipulator of the ball. He always wants the ball, that's the thing; he always wants to get on the ball. He'll want to score and get goals for the team.
"I wouldn't like to say if he's defensive or attacking - he can play in both positions. When he first came to Liverpool, he played defensive of the three.
"Wherever you put Joe, he'll do his best and he's one of those players that are great to have in the team."
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