Celtic take on Rangers in the Scottish Cup semi-final this weekend.
Deila has come under heavy criticism at times this season, notably for the club’s inability to run away with the Scottish Premiership title in Rangers’ absence and also due to their early European exit.
But the Norwegian coach can redeem himself somewhat this weekend, and Celtic Park hero Dalglish feels the Hoops’ boss won’t underestimate the challenge as he understands what’s at stake.
“I think it's an important match for Ronny but I'm sure he won't underestimate it,” Dalglish told the Daily Mail.
“He had his first taste of it last year so he knows what it's about. He understands Celtic. He's been there for a couple of years. He knows what the club stands for and what this game means.”
Deila has managed in an Old Firm derby previously, guiding Celtic to a 2-0 win over Rangers last season.
That said, the Ibrox club have improved greatly this season under Mark Warburton and they will be confident having recently won the first division title as well as the Petrofac Training Cup.
The pressure will be on Deila to secure victory for Celtic, and many have speculated whether a failure to do so could put his position under serious threat ahead of what is expected to be a busy summer.
The Hoops will head into the match as favourites to beat the Gers, and that will only add to the high expectations already placed on Deila’s shoulders to secure a domestic double this season.