Liverpool manager Kenny Dalglish has been rewarded for reviving the team's fortunes with a three-year contract. Dalglish took over the job from Roy Hodgson in January in a caretaker capacity with Liverpool 12th in the Premier League, four points above the relegation zone. They have climbed to fifth going into the final two games of the season and have a great chance of qualifying for the Europa League. First team coach Steve Clarke has also put pen to paper on a three-year contract. Dalglish said: "I said when I took the job on in January that I was just happy to help the club out for the remainder of the season. Now the owners have decided in their wisdom that they want me to stay a little longer and it's fantastic news for both myself and Steve Clarke that we have signed these contracts. "Both (principal owner) John (Henry) and (chairman) Tom Werner have taken their time to assess what was best for the football club and bring in the people they wanted to take the club forward. They are both winners, but understand what the supporters want from a Liverpool side and the way that we should go about things. "This is a unique football club and I'm delighted to have the opportunity to help build something special here again. "I want to salute the efforts of all the players as they have been fantastic and thank everyone at the club for the welcome they have given me since I returned in January. "I also want to pay tribute to Steve Clarke's input since we started working together as he has brought great experience and knowledge to the role. The players enjoy the training sessions, understand their relevance to our actual football games and have responded brilliantly." It has been a remarkable turnaround under Dalglish. Although they lost to Manchester United in the FA Cup in his first game in charge and were beaten in the league by Blackpool, the side quickly turned their form around. After a draw with Everton they won four in a row, including an impressive victory at Chelsea, to fly up the standings. At the end of January, Liverpool broke their transfer record twice in one day to buy strikers Luis Suarez and Andy Carroll following the sale of Fernando Torres to Chelsea, controversial deals that have since looked good business. As well as getting the best from the club's established players, Dalglish has also blooded a new crop of youngsters, several of whom have come through the academy he used to oversee. Liverpool's last five games have produced four wins and a draw at Arsenal to take them above Tottenham Hotspur, who they play on Sunday, and into fifth place. In the form table since the start of the year, only Chelsea are above them. Henry said: "Kenny is a legendary Liverpool figure both as a supremely gifted footballer and successful manager. Since returning in January he has shown extraordinary leadership and the ability to bring the best out of so many people associated with the club. "It was obvious to us very early on that the atmosphere surrounding the club had been transformed by his presence. No one else could have produced such a response. Therefore, I'm delighted we have agreed to a new contract. We didn't need nor want to look elsewhere for the right man to manage the team. "Working closely with him, we've seen first-hand his love for the club and his determination to do whatever is necessary to produce a winning side again. He has a unique relationship with our supporters and embodies everything that is special about the Liverpool way of doing things. "Liverpool enjoys a global standing within the sport, but having Kenny in the dug-out will help us in our efforts to bring the best available talent to the club as we continue to move the club forward." The club's director of football Damien Comolli said they had not looked at other options. "Kenny turned things around very quickly, with the help of Steve Clarke," he said. "For us, it was a no brainer. "He hit the ground running from day one knowing what he wanted to do because he knew the boys anyway, especially the key players like Steven Gerrard and Jamie Carragher, and knew the young players in the academy." The club's new American owners have also been impressed by the influence of Dalglish, a former Anfield favourite as a player and during his previous spell as manager. "It was obvious very early on that the atmosphere surrounding the club has been transformed," John Henry said. "No-one else could have produced such a response." Source: Eurosport