The former London Wasps flanker, who set up a charity to help disadvantaged young people in London last year, lost 19-year-old Francesca in a boating accident in 1989.
The 40-year-old, who was 17 when his sister died, told the Daily Mail: "I didn't know what I was going to do with my life, and I didn't care either. I felt that I had no control over anything. I'd played a bit of rugby at school and wondered if returning to the sport might help channel some of the anger and aggression I felt inside.
"I was invited for a trial with the Wasps, my local club, and as soon as I began training with them, I felt I'd found a sanctuary. Five years later, the game turned professional and it went from a hobby I did three times a week to being my career.
"It can be all too easy for them to slip through the cracks and end up dealing drugs, or in gangs, or perhaps even prison. But I don't believe in giving up on young people when there's a chance to help them."
Dallaglio earned 85 England caps during his career.