McCoist made the comments when asked to pick his best ever XI for the SkySports Fantasy Football podcast.
He said: "Kenny Dalglish... is up there. Kenny in my opinion is probably the greatest Scottish player of all time.
"Genius, absolute genius. He scored a goal against Belgium I remember, he cut inside and bent it with his left peg right into the top corner. I unashamedly put Kenny right in as a striker."
Dalglish played more than 100 times for Scotland at international level, playing at both the 1978 and 1982 World Cups, but missed the 1986 tournament due to injury.
He began his career with Celtic where he won four first division titles and four Scottish Cup trophies in a memorable spell between 1969 and 1977, playing more than 200 games and scoring 112 goals.
The second chapter of his career was at Liverpool where he continued his trophy haul, notably winning six league titles and three European Cups, finishing runner-up in the 1983 Ballon d'Or.
As for Dalglish's strike partner in McCoist's best ever XI, he selected former Rangers hero Derek Johnstone, whose all round talent saw him play at international level up front, in midfield, and defence, adding that he was a 'completely underrated player'.