Allardyce is impressed by the midfielder’s current impressive form.
Dunn, who scored in the 3-2 win over local rivals Burnley on Sunday, will be out of contract at the end of the season.
“Dunny’s goal was top quality and brought us right back into the game,” he said.
“The first thing we’ve had to do with him is make sure he is fit on a regular basis then make sure he knows what he needs to do in the team and on the training ground.
“We’ve found a position for him to play just off the front striker and he’s looking as good as I’ve seen him in a long time. Because he has performed so well in this role, I’ve not been able to pick one of my other three strikers.
“He’s doing a terrific job for us in there and has the sort of quality every team needs.
“He’ll be getting his agent to knock on my door at this rate and it’s something we will deal with when the time is right.”
