A win for Brendan Rodgers's side would take them above this evening's opponents, and the Reds legend feels that both teams are capable of winning the league.
"People keep asking whether Arsenal and Liverpool, who play each other today, are genuine title contenders," Dalglish wrote in his column in The Mirror.
"Well, we're a quarter of the way through the season and they're first and third, so that's the answer.
"Both clubs have made an impressive start. The only thing that prevents you being a title contender is a lack of points and, at the moment, that is not something holding either Liverpool or Arsenal back."
Dalglish stepped down as the Reds' manager in the summer of 2012.