Dalglish was reinstalled as Liverpool manager on Saturday - almost 20 years after his first spell in charge at Anfield ended - following the departure of Roy Hodgson.
Holloway is in awe of Dalglish for his achievements as a player and a manager but feels Liverpool should have given Hodgson longer to turn their season around.
Hodgson held the post for just six months but paid the price for a poor start to the campaign, which sees them 12th in the Barclays Premier League ahead of tomorrow's trip to Bloomfield Road.
Holloway said: "Good luck to Kenny Dalglish, he is a wonderful fella.
"The man is a living legend, he is someone I have admired from afar and for a long while."