All eyes at Old Trafford on Saturday will be on Manchester United's Patrice Evra and Liverpool's Luis Suarez should the two players meet for the first time since a race row.
"It's time for all of us to draw a line under what happened and move forward,” Dalglish said.
However, the clubs have met since October's clash, with Liverpool knocking United out of the FA Cup at Anfield last month, and Dalglish, who along with opposing manager Sir Alex Ferguson has called for calm, believes that tie has helped defuse tensions between the sides.
Reigning Premier League champions United go into the match two points behind leaders Manchester City and 16 ahead of Liverpool.
But for League Cup finalists Liverpool their Premier League goal this term is a top four finish that will guarantee Champions League football next season. And given they are just four points behind fourth-placed Chelsea, that aim remains within their sights.
Last season United's record 19th English title took them one above Liverpool and Old Trafford veteran Ryan Giggs said even though the Anfield club were last crowned champions of England in 1990, they remained a key test.
"We're the two most successful teams in the country, so we know we've got to perform and play well to get anything from any game against them, he said. "It's the club we tried to catch for so long and now we've caught them, the challenge is to stay ahead."