Liverpool announced on Twitter that the former player and manager would be taking a role on the board of directors.
John W. Henry, part-owner of the club, thinks Dalglish can help to further the ideals that the club has come to represent, via Liverpool's official website:
Kenny has a unique insight on the values and traditions that helped to make Liverpool one of the greatest sporting institutions, not just in football, but in world sport. We are proud and honoured to have him back at the club he has represented with such distinction.
Current manager Brendan Rodgers appears to have no qualms with welcoming back a former manager and club legend to have some input on how the club is run, via Liverpool's official website:
When I met with Kenny to discuss this appointment, I was struck by the passion and drive he still has in wanting to see Liverpool return to where it should be - one of the most successful clubs in the world.
We are all together in that goal - owners and supporters, players and management and also icons such as Kenny Dalglish. I want people around us who have this club and what it stands for in their heart.
It's the first time Dalglish has taken an official role with the club since he was sacked as manager following the 2011/12 season. Although it's only been a couple of years, it would have felt like a lifetime for many supporters to have the man they dubbed "King Kenny" to be away from Anfield.
Aside from Bill Shankly, no one person has meant more to Liverpool than Dalglish. He helped lead the club to six league titles in the 1970s and '80s, in addition to three European Cups. Those Liverpool sides of the early '80s are among some of the best in the history of club football.
Then, when his career as a player was done, Dalglish took over as manager, winning another three league titles, including the club's last, in 1990.
The fact that he's back behind the scenes will be considered great news for Liverpool by many and continue the swell of positivity that's been created by their run in the Premier League that's seen them jump to second in the table.