The Colombia defender joined Spurs from Ajax last week for a club-record £40m, the North London outfit's first signing of the summer.
England midfielder Alli believes that increased competition for places at Tottenham will lead to better performances on the pitch.
"It's a positive step, I think we've got a strong side at the minute anyway so any player that the gaffer and the chairman thinks is going to help the squad can only be a positive," Alli told Sky Sports News following the 2-1 defeat to Chelsea on Sunday.
"Competition is always good so I'm sure the players at the back will be working hard to try and keep their places and he'll be coming in and trying to fight for his place. If everyone's trying and everyone's playing well it can only be a positive effect on the team."
Sanchez, 21, was Ajax's player of the year last season and was also a reported target for Barcelona and Inter Milan.