The 21-year-old, who moved to the Reds from Sunderland this summer, has had his ability questioned after he cost the Merseyside club £20m.
Despite not having a regular position in the team, Dalglish believes that the England Under-21s player will go from strength to strength.
"I don't know his best position yet - but I know his best club and that's this one," said Dalglish. "We just want him to play and enjoy playing.
"He's a talented footballer with a great future in front of him and we are just delighted he chose to come here.
"He'll be here for a long, long time and he's going to be a tremendous asset for us. He's got patience too."
The Reds host Norwich City at Anfield in the Premier League's late kick-off tomorrow.