Club captain Gerrard, who only recently returned to action after a long-term groin problem, missed last weekend's win at West Brom and is set to sit out the Premier League clash with Swansea and England's two upcoming friendlies against Spain and Sweden.
Gerrard was pictured leaving hospital on Sunday on crutches with his right leg in a protective cast, leading many to speculate about the severity of his condition. However, Dalglish has moved quickly to ease the growing concern.
"Since they have found the infection he has progressed extremely well and everything is positive for him," he said. "We found the infection but I suppose it is a bit like flu - you know you've got it but you don't know where it came from.
"But it is responding really well so that is positive for him. There's nothing more sinister either."
Jamie Carragher (calf) was also missing when the Reds beat the Baggies 2-0 at the Hawthorns and although Dalglish says the team is stronger when he has the experienced duo at his disposal, he is delighted the squad are able to cope without the likes of Gerrard and Carragher.
"We will have a rain check on Carra," Dalglish said. "If he's not going to be right he's not going to be right. I think as a club we are much better with those two fit.
"They have been fantastic servants for the club and they will continue to be. It is a great achievement for the boys to get a result at West Brom without either of those two playing."
Meanwhile, Dalglish has reiterated his desire to have the investigation into alleged racism by Luis Suarez concluded as quickly as possible.
It is now almost three weeks since Manchester United defender Patrice Evra claimed the Uruguay international racially abused him a number of times in the 1-1 draw at Anfield.
"The FA have been here and spoken to us,'' said Dalglish. "Our philosophy and desire has not changed whatsoever - we want it resolved as quickly as it possibly can be and want the perpetrator punished. I don't think we need to add any more than that.''
A spokesman for the FA said the matter was ongoing and they did not expect a conclusion this week.