The 75-year-old shared the news after accidentally making the information public on social media. While he had hoped to keep the matter private, Dalglish addressed the situation in a statement and thanked the medical staff caring for him.
"As my inadvertent social media post has indicated, I am currently undergoing treatment for cancer," Dalglish said.
"Unlike my mobile phone use, the treatment is going well.
"Ideally, this would have remained private because that's the way it should be, but my useless technology skills have forced my hand.
"Obviously I did not mean to make this matter public so I would appreciate it if the privacy of my family and myself are respected."
Dalglish also praised the healthcare professionals involved in his treatment.
"As ever, thank you to the wonderful medical staff who have shown incredible care and discretion, not just for me but for many, many others. They are a credit to themselves."
Liverpool quickly issued a message of support for one of the club's greatest figures.
"The support, best wishes and love of everyone at Liverpool FC are, and will continue to be, with Sir Kenny and his family," the club said.
Liverpool also reiterated Dalglish's request for privacy as he continues his treatment.
Dalglish remains one of the most influential figures in Liverpool's history. During his playing career at Anfield, he made 515 appearances and scored 172 goals, helping the club win eight league titles and three European Cups.
His success continued in management. As player-manager, he guided Liverpool to a historic league and FA Cup double before adding two more league championships. He later led Blackburn Rovers to the Premier League title in 1995 and also managed Newcastle United and Celtic.
Dalglish's most recent spell as Liverpool manager came in 2011-12, when he guided the club to League Cup success, ending a lengthy wait for major silverware.
