The 26-year-old scored only his second goal of the season in the Premier League clash against Rovers at Anfield and, crucially, it was the winner.
Rumours have been rife about the Spain international's happiness under the new regime at Anfield but Hodgson thinks other matters have been weighing him down.
"Fernando played well today, an awful lot better. In my opinion that was his best performance for the team this season," said the Reds manager.
"It is very nice when you have had a good performance and caused as many problems as he did and looked as likely to score as he did on so many occasions that he actually got one and put it in the back of the net.
"He will be very happy tonight and we will need him to score many more goals if we are really going to move into a position in the table where we think we should be.
"He was very down when he came back from the World Cup; maybe people do get a bit down when they are constantly criticised left, right and centre.
"He obviously was affected by the amount of criticism he took during the World Cup and of course then the criticism which has come to the club and myself when we haven't produced the performances.
"I think maybe he is starting to come out of that and find the joy of playing again and re-find his energy and intensity."
Hodgson added: "It is something we work on in training all the time but you can't infuse that into a player, you can talk about it, demand it, ask him for it but he is the one who has to find it himself when the match starts.
"I think he did that very well today and it is a long while since I have seen a team create as many chances as we did, especially in the first half to score no goals."
Goalkeeper Paul Robinson kept his side in the game in the opening 45 minutes but three minutes after the interval Sotirios Kyrgiakos put Liverpool ahead.
Moments later a mix-up in defence saw Paul Konchesky's goalline clearance from El-Hadji Diouf's shot cannon back off Jamie Carragher and into the net - the defender's seventh Premier League own goal.
However, just five minutes after going in front for the first time Torres drifted in at the far post to sidefoot home Joe Cole's cross.
It was the second time he had scored the winner - he struck the only goal in the Reds' only other victory at home to West Brom at the end of August - but his fifth in four matches against Rovers.
His goal was as much of a relief to the Spain international as it was to Hodgson, whose position has been under increasing scrutiny after the club's worst start to a league season since 1953/54, when they were relegated.
"I'm very happy with the three points and very happy with the performance," said the Liverpool manager.
"There were elements of our performance today which have been visible in matches we have lost or drawn so I don't want to suggest everything is hunky dory.
"It was more than deserved and I was very happy with the way the team played in the first 70 minutes."
Blackburn boss Sam Allardyce felt the absence of central defenders Christopher Samba (suspended) and Ryan Nelsen (injured) cost them.
"In the end we could not hold on any longer because we did a sterling job trying to hang on in the first half, particularly Paul Robinson," he said.
"We could not cope with the aerial side of Liverpool because of the loss of Chris and Ryan, who are dominant in those areas, and we eventually cracked.
"We got an opportunity to do better when we scored but when I see the second goal it is the reason why we missed those central defenders.
"We wouldn't have let Fernando Torres in there free, six yards out, had we had Samba and Nelsen.
"But I can't complain about the result."