Kenny Dalglish given new Liverpool deal

The Scot has been rewarded with an extended deal having initially taken over in a caretaker role when replacing the sacked Roy Hodgson in January.

"I'm obviously delighted to be given the opportunity," Dalglish told the Liverpool website.

"When we came back in January there were no promises as to what to expect, so for me it was an ideal opportunity to prove I had something to offer."

The former Scotland striker has returned for a second stint in charge of the club he famously graced as a player in the 1970s and 80s.

He has overseen a dramatic improvement in results, with the Merseysiders climbing up to fifth in the Premier League from mid-table mediocrity having strung together some impressive performances.

Dalglish oversaw the signings of the brilliantly influential Luis Suarez and former Newcastle hitman Andy Carroll, as well as the sale of Fernando Torres to Chelsea.

Liverpool have thus been transformed from under-achievers into a club seemingly set for next season's Europa League - and with a fighting chance of being a force in the 2011-2012 Premier League season.

Negotiations with Dalglish had been ongoing for several weeks with the final details made public on Thursday.

Coach Steve Clarke, who also arrived in January, has signed a three-year contract as well.