Alvarez struggled at times last season as Inter experienced a tough spell under former coach Andrea Stramaccioni, with just seven goals to show for his first two campaigns at the San Siro.
Montella believes that the Argentine is an exciting player yet to realise his full potential in Italy, admitting that Inter rejected any notion of selling him last summer.
He told reporters at a pre-match press conference: "Alvarez is an exceptional player and we tried asking for him, but Inter didn't want to sell. He is very talented.
"I believe a great deal in the resurrection of players. After a dark period, if you have pride and a pragmatic Coach, then the results will arrive."
La Viola come up against Inter tomorrow in Serie A with both sides unbeaten after four league games, while Alvarez has two goals to his name early in the campaign.