The former Brentford man joined the Championship side this week.
The 28-year-old moved to Elland Road from their Championship rivals Brentford for £600,000 earlier this week, despite interest from Rangers (via Daily Record). And McAllister suggested that now the Whites have seen off competition from Mark Warburton's side, the midfielder can help them get back to where they feel they should be.
McAllister told the Record: "I live in Leeds so I want the to club improve. I was happy to see them get Diagouraga as he's a top player. If Rangers were in the Premiership – and it looks like they will be back there next season – would it have influenced his decision?
"You don't know. Leeds are a big club and have the same ambitions to get back to their top division.
"Diagouraga is exactly the type of player they need."
Although he worked under a different chairman, McAllister will have a very good idea of the kind of pressure that current Leeds boss Steve Evans is working under, having managed the club in 2008, when they found themselves in League One.
And having been an integral part of the Leeds side that won the First Division title in 1992, McAllister will also know that that pressure will only begin to relent when the Yorkshire club is back competing near the very top of the English game. Luckily for Evans, the 51-year-old believes that his old side have bagged the kind of player that will set them on the right path.
The Frenchman made his debut for the club on Tuesday - coincidentally against his former side - having come on on the hour-mark to help the team find an equaliser, having gone a goal down during the first-half. Fortunately for Leeds, Mustapha Carayol scored late on to ensure that the points were shared.
And with Leeds needing an almost perfect run from now until the end of the season if they wish to put themselves in promotion contention this season, Steve Evans will be hoping that McAllister's assessment of the club's new signing proves to be accurate.