The Reds put Sunday's defeat at Spurs behind them by beating Brighton 2-1 to reach the fourth round of the Carling Cup to the delight of the boss.
"I thought the first-half performance was fantastic by the players. I think we responded to the disappointment that everyone saw on Sunday. They were a great credit to themselves and the club with the way they went about their work," said Dalglish.
"Some of the football - the passing and the movement - was exceptional. It's obviously very difficult to keep that going for 90 minutes. It was a difficult game and a positive result for us. It was also positive news that Steven got 15 minutes for us.
"Jack Robinson got 90 minutes, as did Sebastian Coates. Maxi got a game and played well. Craig had a great game and scored. Martin Kelly almost played a full game too, so it was a good night for us.
"We've got a stronger squad than what we had last year and that's reflected in the team we picked. We can only pick from the squad we've got."