The Spaniard scored a hat-trick in the 6-1 victory against Hull City on Saturday.
“In the last three games he was really good, he is improving his mentality, work-rate and movement and he is now showing his ability, but I think he can do it better,” said the Liverpool boss.
“The main thing is the mentality of the player. He is keen to learn and he will improve, but how much depends on him.”
“If you think about the money we were spending on players we then decided to spend £20million on Torres – that was a massive figure for us,” admitted the Liverpool boss.
“We decided to bring him here because of his quality, but also his potential and the future he had.
“We had a lot of confidence he would get better and we are pleased now, but he can improve.”
“The first goal was important, but after we conceded I thought our second goal made a big difference,” he added.
“The team was playing with confidence, creating a lot of chances and at the end of the game we could change players and think about the next game.
“Six goals is fantastic, but it could have been even better because we had more chances at the end.
“The positive thing was the mentality of the team going forward, trying to win the game and still trying to score more goals.”