Alan Kennedy believes the Reds will challenge for the title next season – and points to the way Kenny Dalglish ended his own Liverpool career in 1985 as proof the Scot has a knack of getting things right.

It is more than 26 years since newly installed player-manager Dalglish sold Kennedy - who had scored the winner in two European Cup finals - to Sunderland and replaced him with a younger Jim Beglin.

The decision may not have gone down well at the time - but in hindsight Kennedy believes it was the correct move.

"He knows exactly what he's doing," the former left-back told Liverpoolfc.tv. "As a rookie manager in 1985 he made decisions about the team and aging full-backs like me and Phil Neal.

"We were thinking, 'Is he making the right decision?' Then they won the double. He brought in Steve Nicol and Jim Beglin, and Barry Venison came to the club as well.

"He generally gets things right, and he's got some good people with him, like Steve Clarke, Sammy Lee and Damien Comolli."

Kennedy is now back at Anfield entertaining fans in the Carlsberg Lounge on matchdays, so is well placed to assess our form over the last few seasons.

The 56-year-old believes Dalglish is getting the best out of the resources at his disposal.

"They've set the standard now and they've got to keep it up," said Kennedy. "I've never seen this team (the current set of players) playing so well, and with the addition of two or three players in the summer, we can win something next season.

"If everyone pulls their weight then I think we've got a good chance of challenging for the league."

Jordan Henderson became Liverpool's first signing of the summer on June 9 and player recruitment is an area where Kennedy thinks Dalglish excels.

"Kenny has the ability to get players to come to Liverpool," he said. "In the past few years people have maybe said, 'I think I'll go somewhere else.' But Kenny will attract players."