The Hammers boss admits he has been questioned by many about whether it was the correct decision, with several of West Ham's strikers currently unavailable and Zarate clearly showing bursts of talent when he has been given a chance throughout the season.
Allardyce, however, says it simply would not have made sense to keep the 27-year-old Argentine at Upton Park when he did not want to carry on playing there.
Such a decision, according to the 60-year-old boss, would have made it hard to get the best out of Zarate, meaning the loan move to QPR is fully justified as far as the West Ham boss is concerned.
"The answer, quite simply, is that Mauro wanted to go, he wanted to play more football. His chances here had been limited and it came to the situation where he didn’t want to stay here," Allardyce wrote in his weekly column for the London Evening Standard.
"If he had remained, in that frame of mind, it would have been difficult to have got the best out of him, so it was the right thing for everyone that he went out on loan to try and play more often somewhere else."
However, the West Ham boss delivered a clear hint that there could be a long-term future for QPR loanee Zarate at Upton Park, admitting it will be 'interesting' to see whether the forward comes back a different player.
"Let’s see what happens. It will be interesting to see whether he comes back a different player," he said.
Naturally, Allardyce's last claim suggests a more in-form Zarate could definitely play a part at West Ham should his QPR move prove a success.