The 27-year-old winger played a starring role in the midweek clash against Manchester City, helping the Reds secure their place in the Carling Cup final - which will mark their first trip to Wembley since 1996.
Downing has been encouraged by his recent showings, and after a string of impressive displays, the England winger feels he is ready to hit top form.
"It was very nice to hear," reflected Downing to Liverpoolfc.tv following the praise he received from Dalglish. "The manager has been really good to me from the first day I came.
"He's given me lots of confidence - and it's the same with every other player. He's great to play for. That's all you want as a player - a manager who is honest with you, who gives you the confidence to go out and play."
Opta stats show that Downing has created a total of 41 chances in 21 league outings this season, but his erratic delivery at times has come under increasing scrutiny from Liverpool fans.
"I started quite brightly, then was in and out, and now I'm starting to pick up form again," he added. "I want to play all the time but the only way I can do that is to play well.
"I've got to get my head down and work hard, and the last couple of weeks I'm pleased with how it's gone personally."
After Wednesday's euphoria, attention now quickly turns to this weekend's FA Cup fourth round clash with Manchester United, and Downing is anticipating another highly charged encounter.
"You have to start well against a big team because if they get early goals it's hard to get back into the game," said the wide man. "We have to do that because top players hurt you if you're not on your guard.
"We've set a good standard against City. We played ever so well even though we drew the game. You could see defensively that everyone worked for each other and we attacked with good pace and penetration. That's the standard we've set and the idea will be the same - to attack.
"As a team we should go out and be really confident playing against United that we can beat them. We proved that earlier in the season, we should have beaten them."