Gerrard missed the midweek victory at Wolves but is ready to start when Harry Redknapp's side arrive on Merseyside. The Liverpool skipper is one half of a double boost for the Reds, who also have Luis Suarez back from suspension.
Dalglish admits he has a selection dilemma for Monday's clash, and he refused to guarantee that Suarez will walk back into the starting line-up. In his absence Craig Bellamy and Dirk Kuyt have both excelled, while Andy Carroll finally found the goalscoring touch at Molineux.
"Steven will be back in the squad for Monday, so we're looking quite healthy at the moment - but there are three days of training to go, so more often than not you can pick up something in that," Dalglish said.
"At the moment we look as though we're okay and have players to choose from. That gives us a problem, but it's a pleasant one.
"There's a selection dilemma every time you pick a team because you know you're hurting someone by leaving them out, and when they've worked so hard during the week it is difficult to do that.
"The more people we have available, the stronger the squad is and the better chance we have of competing. Certainly Luis and Steven coming back into the squad on Monday strengthens the squad."
Dalglish was clearly delighted to see Suarez return, saying: "Luis is smashing. He's good, he's in and around the place and he's quite happy. We'll have a look and see how he is in training before we pick a team for Monday night.
"We'll take everything into mind - we'll have a look at Luis, we'll have a look at the other boys who have played and we'll have a look at the opposition and then we'll make our decision.
"He's a fantastic player, but then there are a lot of fantastic players in the squad. The stronger your squad is, the better chance you have of competing - and he certainly makes the squad stronger as an awful lot of them do."