Dalglish, who won six English league titles and three European Cups as a player and three more league crowns in his first stint as manager, left the club in May 2012 and was replaced by Brendan Rodgers.
The Scot helped stabilise Liverpool through a difficult period on and off the pitch before being dismissed following an eighth-place finish in the Premier League and an FA Cup final defeat by Chelsea at Wembley.
The club said in a statement that his new role would “allow the ownership and senior management to benefit not just from the Anfield legend’s decades of experience but also his close affinity with supporters”.
Dalglish said: “It is an honour and privilege to be asked to return to Liverpool as a director. I have always said if there is anything I could do to help this club I would make myself available – when the call came I had no hesitation.”
The move has gone down well with Rodgers whose position has been strengthened by a positive start to the season with Liverpool lying second in the Premier League.
“When I met 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,” Rodgers said.
“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.”
Liverpool host second from bottom Crystal Palace in the league on Saturday.
Source : http://uk.eurosport.yahoo.com/