During the six months Roy Hodgson was in charge, the team struggled for results and performances - but Dalglish had an almost instant impact, turning around the club's fortunes.
Real Madrid full-back Arbeloa said: "I think they played maybe too many long balls under Hodgson.
"I think Liverpool are the type of team that has to play more football.
"Technically they have some really good players and they need to play more football.
"I think with Dalglish, who was one of the best players in the history of Liverpool, they look more confident and they improved a lot."