The West Ham boss is delighted with the captain's response to being dropped.
Nolan was recently left out of the first team by Allardyce, with the 60-year-old reinstating him against West Brom.
The captain's response was to get on the scoresheet as the Hammers secured another win at the Hawthorns.
And Allardyce is delighted with the strength of character shown by Nolan, suggesting he 'showed the right reaction.'
"Our captain came back into the team at West Brom and demonstrated to everyone his strength of character and ability," the West Ham boss wrote in his weekly London Evening Standard column.
"As a manager, I have to make big decisions and they don’t come much bigger than leaving out your skipper.
"Kevin Nolan showed the right reaction, though, and that is what is happening across the board. Players will be more and more disgruntled when they are left out but they will get their chance to come back in and perform - and that’s just what Kevin did.
"He didn’t feel sorry for himself, he just went out and proved his worth. He didn’t allow his disappointment to affect him."