The Welshman has impressed for Jurgen Klopp's side in recent weeks.
Allen has only managed 13 appearances so far this season, as injuries have limited him to 376 minutes of game time.
That has largely been due to injury as several knocks have stopped him building up any momentum under new manager Jurgen Klopp.
Recent weeks have seen him starring in the first-team though, with a series of impressive displays in the Reds midfield.
And Milner has praised his teammate's performances, saying the intensity Allen has played with has been unbelievable.
“He’s a top player, with a great attitude as well,” he told liverpoolfc.com. "He probably hasn’t played as much as he would have liked over the last couple of months.
“To come in and hit that level straight away, and the intensity he has played with, is unbelievable. He’s great on the ball and [with] his energy levels."
Allen will be hoping he can have an extended run in the team between now and the end of the season.
He has the perfect chance to do just that as well, with Jordan Henderson’s recent injury having opened up a slot for the Welshman in the starting line-up.
His recent performances have not done any harm to his chances either, and he will be keen to start with a positive display against Borussia Dortmund this week.