Allardyce took charge of the Black Cats back in October, and Watmore has thrived under his stewardship so far.
The youngster has shown plenty of promise in a number of cameo appearances, and he scored during Sunderland’s latest 2-0 win over Stoke City.
“We’ve got Duncan who came on and made an impression last week, which is nice to see a young man burst on the scene and show excellent ability,” Allardyce said.
“That’s a massive bonus, I did not expect that when I came here.”
Watmore could be in line to start for Sunderland at the weekend in their match against Arsenal at the Emirates Stadium.
With Jermain Defoe out injured, Allardyce is short of options, and Watmore looks the most likely candidate to step in.
If the 22-year-old does start, it will be the toughest test of his career so far, but Watmore has coped with every challenge that has been thrown at him.
The youngster’s fearless style has caught the eye, and his commitment to Sunderland was confirmed recently when he penned a new contract through to 2020.
Watmore has made nine senior appearances for Sunderland and scored three goals in his career to date.