The Brazil international midfielder admitted he considered quitting Anfield after struggling for playing time under the England manager, but is glad he stayed to win a place.
The 26-year-old joined the Reds in 2007 but struggled for opportunities on arrival, and revealed that when Rafa Benitez left the club for Hodgson he thought he should seek his chance elsewhere before he began to win a place in the starting XI under Kenny Dalglish.
"I felt as though it was almost the end for me at the club," he told the Liverpool Echo. "I nearly left. I knew they were looking for players. They signed Christian Poulsen at the time, and that was a message for me, that I was not really in their plans. So I was really close to leaving to go to Italy. For some reason I did not go, I stayed.
"After a few games, I got my place back in the team and I started to play a bit more. Then Kenny came in. I really started to play with a lot of confidence and at the end of the year I was voted Player of the Season by the fans. So that moment was very important."
He believes that at the age of 20 he was not ready for the strong completion in central midfield at Anfield but is glad he opted to stay and win his place following the departures of Xabi Alonso, Javier Mascherano, and Mohamed Sissoko.
"For me to come here and to try to get into the team competing against Gerrard, Alonso, Mascherano and Sissoko was very hard," he said. "I left Brazil in a really good situation and here I was sometimes not even on the bench and out of the squad. It was a difficult period for me but I think it was worth it. Today I realize how important it was for me to have that struggle because it taught me to work hard."