New Liverpool boss Roy Hodgson says he would be delighted if Kenny Dalglish stayed with the club.
Hodgson was chosen ahead of the Reds icon by Liverpool's board.
The former Fulham manager, 62, dismissed suggestions that the race to succeed Rafa Benitez could have jeopardised his long-standing friendship with Dalglish. He also revealed details of a new post that will establish Liverpool's recently appointed club ambassador as the main link between the academy at Kirkby and senior squad at Melwood.
"I don't feel at all awkward about the situation," said Hodgson after signing a three-year contract worth around £50,000 a week.
"Kenny was entitled to suggest to the board that he wanted to be considered. The board made it clear to me that they didn't want that to happen, as the chairman (Martin Broughton) has outlined.
"As far as I'm concerned, it shouldn't affect my relationship with Kenny in any way. I'm happy to have him on board at this club and he has been offered a new role, with the very important title of head of football development.
"With us having to have a certain amount of homegrown players and under 21 players, the way Ken can use his football knowledge to build a bridge between Kirkby and Melwood can be hugely beneficial.
"When you have someone like Kenny Dalglish, you want him to be at the club for the foreseeable future, for 10-15 years just like Sir Bobby Charlton at Manchester United. There are so many roles he can play to help Liverpool FC and that will outlive my tenure at the club."
