Holloway, working on a shoestring budget, won promotion to the Premier League via the play-offs in his first year in charge.
Having taken Leicester down to League One in his only season in charge at the Walkers Stadium and then spent 12 months out of work it was a remarkable turnaround in fortunes for the Bristolian.
Allardyce, who tomorrow takes his side to face the club he managed in the mid-1990s, believes Holloway's work has not been appreciated as much as it should.
"He has been a good manager for many years," he said.
"This is a major achievement and there are not many managers who have done what he has done and he should be very proud of his successes.
"When you look at what resources they have we don't give them the plaudits they deserve because they are a small, unfashionable club.
"But in terms of resources and finance it lies alongside anything Alex Ferguson or Jose Mourinho has done, in reality.
"Ian probably thought he was written off as a manager but got the opportunity to go to Blackpool and he has put all his experience together.
"He created enough energy and management know-how to take the players that he put together and make them play as a team and they thoroughly deserved what they got in the end.
"It is a fairytale story. Now the hard part is trying to maintain their status in the Premier League."
Similarly, Allardyce still feels his efforts at Bloomfield Road were unappreciated.
After a brief temporary spell holding the fort at Preston he was given his first full-time managerial appointment by Blackpool in 1994 aged just 39.
In his second season he guided them to third in Division Two but, after winning 2-0 in the play-offs at Bradford, they crashed out at home 3-0.
He was sacked soon after and to this day he still has no explanation as to why, admitting his career could have taken a very different turn had Notts County sought him out eight months later.
"I still haven't really understood it," he said.
"I was in the very early stages of my career as a manager and that sacking could really have damaged my career.
"I was not that established as a manager but losing in the play-off has some credibility by doing well at a club like Blackpool over two years.
"Thankfully I got the job at Notts County and I continued to go on from there.
"It was a devastating time and I didn't understand it but it is long gone and, as a manager, I've moved on and upwards."
He will hope to get the better of Holloway tomorrow, although his side are lacking confidence having not won in the league since the opening day of the season while Blackpool have taken seven points from their first five matches.
"We've got to go out and compete against a side which is full of confidence and probably didn't expect to pick up as many points as they have," he said.
"If any Blackburn supporter thinks we'll go there and it will be an easy ride for us I can tell them it won't be."