The former Chelsea and Netherlands boss feels the Reds can turn the corner under Brendan Rodgers, and he is adamant they can become a competitive force in the Premier League.
The former Netherlands boss takes his side to Anfield in its UEFA Europa League clash with the Reds after enjoying a solid start to the campaign, taking four points from their opening two games.
Hiddink recalls when he was Chelsea boss towards the end of the 2008-09 season, when Liverpool was challenging for the Premier League title but ultimately finished second to Manchester United.
The 65-year-old believes that despite the tough start to the season the Reds have suffered under new boss Brendan Rodgers, he is confident the club will return to their days of dominance in England's top-flight sooner rather than later.
"Of course, [in 2009] they had different players and were more leading in the Premier League," Hiddink told reporters. "This season they have had a problematic start, but this is a huge institution - it will always recover. Liverpool will always resurrect and come up to the top, where they belong."
Liverpool is currently third in Group A on three points after beating Young Boys in their opening game, but the Reds then suffered a 3-2 defeat to Udinese in their last Europa League encounter.