The Scot joked of the "bad decision" after urging the Uruguayan to take the spot kick in front of The Kop as the home side romped to a 6-1 FA Cup victory against Brighton
Dalglish's side were already on top at Anfield when the Scot urged the striker to take the spot kick, which was saved by Peter Brezovan.
Suarez scored Liverpool's sixth to avoid any embarrassment, while his manager had been hoping to help boost the Uruguayan's confidence with a goal.
"That was a bad decision," Dalglish joked to ESPN.
"There was Charlie [Adam] and Dirk [Kuyt] wanted to take it. Maybe if it had not have been 5-1, one of them would have taken it.
"But I thought it would have given Luis a wee leg up and help him on his way and get a goal at The Kop, which would have done his confidence no harm.
"But he did not need my help. Big Andy [Carroll] gave him all the help he needed with the sixth goal."
Dalglish also played down the convincing victory ahead of the League Cup final against Championship side Cardiff City.
He said: "It gets us into the next round of the FA Cup. It does not really help us in the League Cup.
"We will not be carried away. We have got our reward for what we have done there and we have got a cup final at Wembley to look forward to."
Liverpool will now face fellow Premier League side Stoke City in the quarter-final of the competition.