Midfielder Allen brought an end to his time with boyhood club Swansea during the summer to join Brendan Rodgers at Anfield.
Speaking ahead of the his side's meeting with the Reds in the League Cup tomorrow night, Monk was full of praise for his former teammate.
"He is a top player. Everyone knows his quality as a player," Monk told reporters. "He is a great lad and a great talent and he is proving it now at a very high level."
Veteran defender Monk has been tipped to start the tie, while Allen could be named among the Liverpool substitutes.