Allardyce believes the 29-year-old Norway international is getting back to his best.
Pedersen signed a new contract with Blackburn over the summer.
“It’s not the best I have seen him play – I came and watched him when he played for Blackburn in his earlier days and I have spent many days at other clubs on how to stop the quality that he has,” said Allardyce.
“But he is getting closer and closer because there are goals coming on the end of his good performances and it shows what a key signing it was.
“We signed a free transfer this summer worth in today’s market about £8-10million – a player with around 200 Premier League games who scores goals and delivers balls in to the box. Where can you find one of them for nothing?”
