Dalglish's arrival at Liverpool in January sparked a major upturn in performances and the Reds' form over the second half of the season was so good that they almost sealed a European place.
Dalglish has gone on to spend big money on Stewart Downing, Charlie Adam and Jordan Henderson, and Carragher knows expectations at Anfield will be greater than ever.
He told the club's official website: "Kenny has had a major impact since coming in at a time when results weren't going too well for us. Since he and Steve Clarke arrived they have done a great job and hopefully we can carry that into next season.
"It's great to work with Kenny again because he is a legend of the club, not just as a player but as a manager as well. He is someone who everyone looks up to and the foreign players will be aware of him also.
"We'll have to see how the season goes but we know that the expectations are there. We're like any club in that we want to do well.
"The start of the season is the time when things can get ruined for you if you don't get good results early on so we have to focus on that first game against Sunderland, make sure we take three points and then go from there.
"It's all well and good people saying last season that Liverpool almost made Europe and moved up the table, but our standards are raised higher than that and we want to do better."