The Reds have reached the semi-finals of the European competition for the first time since 2009-10, with January signing Van Dijk featuring prominently as Jurgen Klopp's defence conceded just the once in four matches against Porto and Manchester City.
Hyypia was convinced Liverpool didn't need to make any major additions in the winter window, but he has changed his tune in light of the £75 million signing solidifying their back four since his arrival.
"I think it was a good decision to sign him," Hyypia, who won the Champions League with Liverpool in 2005, told Goal. "He seems to have leader qualities that he’s advising everyone and he’s talking a lot.
"I think he keeps everyone kind of confident because he’s a quite confident player and he’s a good football player and good defender so he gives confidence to others.
"Since he has been in the team they’ve cut off the individual mistakes at the back. Every player seems to have raised their level.
"I don’t know if it’s that they have been training better, but I think that kind of character next to you helps. He’s confident and he gives that confidence to others, and I think that’s one of the main things Liverpool is doing quite well at the moment.
"When he’s a leader he takes the burden off the other leaders. I thought Liverpool didn’t have many leaders in the squad.
"And now come one more and he takes the burden off the others like [Jordan] Henderson and [James] Milner, and I think they’ve raised their level as well."
The Anfield side have conceded just 14 goals in the 18 matches that the newly-minted Netherlands captain has played in all competitions, including the one goal they allowed over two legs against Man City's high-powered attack.
Like Hyypia, Spanish midfielder Luis Garcia started for Liverpool in their historic Champions League final triumph over AC Milan 13 years ago, and he sees Van Dijk bringing the kind of presence vital for a team with title aspirations.
"It’s so important because at the end, in the back, it’s the one who rules or consults what is happening in front of you," Garcia told Goal at the recent launch of the International Champions Cup in Miami.
"So, having someone who you respect, who is talking always in a positive way, and a constructive way, and also perform the way that, for example right now, Van Dijk is doing.
"He plays in the air, does well with the ball. I think it was very important and necessary because of the lack of personalities on the pitch, only with Milner and Henderson in the last couple of years, they’ve been the players to become our Gerrards or Carraghers or Hyypias."
Now, as Liverpool prepare to face Roma for a place in the Champions League final against Bayern Munich or Real Madrid, the talk is no longer about Liverpool's defence being a liability, but rather a strength.
"I think the balance right now is very good," Garcia added. "It was very important to work on that. Jurgen knew it from the very beginning of the season.
"But at the end bringing in Van Dijk I think gave a lot of confidence to the players around him. I think it was very, very important for the club to organise at the back because you know how much talent we have up front."
Hyypia added: "Nobody likes to concede a lot of goals, and that’s what they did in the beginning of the season. If it’s sorted out by signing only one player then that’s very easy for Mr Klopp, but we will see. I think everyone has to keep working hard and keep improving."
Liverpool host Roma at Anfield on Tuesday night before returning to the Stadio Olimpico eight days later.