There have been calls for Southgate to drop the 22-year-old for Saturday's quarter-final with Sweden, but the Three Lions manager has insisted that Alli has done "a fantastic job" in Russia.
"In terms of Dele, I thought his performance against Tunisia was as good as he's had since I've been England manager," Southgate told reporters.
"He is at his best when he's making those forward runs and really threatening opponents with those forward runs from midfield. The other night, the game was a little bit different but he did a really diligent job without the ball for us.
"I think maybe we need to encourage him a little bit more to get into those areas where I think his strengths lie. Where he can have the biggest impact on the game. That is something I need to think about tactically but like I say, he did a fantastic job for the team."
Should England progress past Sweden, they would face the winner of Croatia and Russia in the semi-finals of the competition next week.