The Scot, who remains the last Liverpool boss to have won the league title, in 1990, was sacked in the summer despite delivering the club's first trophy in six years with victory in the Carling Cup and also reaching the final of the FA Cup.
Liverpool's eighth-place finish persuaded owners Fenway Sports Group they needed to look elsewhere for progress and they turned to Brendan Rodgers.
Dalglish is not bitter about his departure or his second spell in charge at the club but admits the priorities for top-flight managers have altered since his first period in the role.
"Success is gauged in different ways. It is a bit different now to what it was before," said Dalglish, speaking at the launch of The Football Pools 90 Day Community Challenge at St Helens Junior Football Club, who received funding of £50,000 to makeover their club.
"You have four spots to get into the Champions League, you can win the two domestic trophies, you can win the Europa League or qualify for Europe.
"I am sure if you asked some of the clubs, fourth-bottom is success. Everyone has a different idea.
"Staying in the Premier League is success because the value of the league is a trophy in itself because of the financial reward.
"But (you must) put the marker down before the start of the season and then judge a manager at the end of the season."
Dalglish has been back to Anfield to watch his former team just once since his departure in May.
He stressed that was because of circumstances, but he also admitted it did Rodgers no favours when everyone from former club figures to the media readily gave their critique on his short reign.
"The last thing people need is for others to be giving their opinions," he said.
"I know the job is a hard job - not just Liverpool but management.
"If you want to be manager of any club you have to adjust to the job, whatever that entails and whatever the sideshow entails, you know what it is before you get into it.
"You just have to adopt whatever attitude you think is right whatever club you go to.
"At the end of the day it is up to you. If you didn't know what they were before you went in that is your problem.
"And once you're in, if you don't adapt to it you are still going to have a problem and if you don't like it don't go.
"Liverpool is not exclusive in that, every football club is like it.
"Wherever you go in life, whether as a football manager or whatever, you know what has been there before you and if you don't fancy it don't take it.
"The last thing a manager needs, irrespective of what club it is, is for other people to be saying 'Do this, do that' - there are 44,000 people picking his team every week."
Dalglish, who has been linked with the vacant Scotland manager's job, stressed he had not made any plans about a return to the game.
"It's not a no and it's not a yes either. I've never said it was closed or open," he said.
"I have no ideas in my mind and I've no idea what the future holds. I am just happy to jog along.
"Football is never going to leave your blood when it's been your life but I can pass the time easily.
"If someone representing a job is going to come and ask me a question it will dictate what I do in the future and then you have a decision.
"Until then there is no point in worrying about it."