The Liverpool captain underwent surgery on a groin problem last month, but suffered a setback in training last week and subsequently missed Saturday's clash with West Brom.
Dalglish revealed the news during his pre-match press conference at Melwood on Friday morning, though the precise nature of Gerrard's injury has yet to be determined.
The boss said: "We still don't know definitively what the problem is, so we will wait until we get a precise answer from the people he has been to see.
"But he will not be involved again this season, so that's Steven as well for this season.
"It's a blow to have anybody out, but it's more disappointing for the players than it is for us. We just have to get on with it.
"Without being disrespectful to the players who are injured, the most important ones are the ones who are fit because they're the ones who can be chosen.
"At this particular moment in time, I'm as good a player as Steven!"
The news regarding Gerrard's fitness comes just days after Daniel Agger was ruled out for the remainder of the campaign with a knee injury sustained at West Brom last Saturday.
Glen Johnson is also facing a stint on the sidelines after picking up a hamstring problem at the Hawthorns, though the England defender remains in contention to figure again this season.
Click on the image to watch Kenny talking about injuries
While acknowledging his disappointment at losing the services of three key players, Dalglish insists Liverpool will not be feeling sorry for themselves.
Instead, the boss has challenged the rest of the squad to step up to the plate and help maintain the Reds' quest for European qualification.
Dalglish said: "Anybody getting injured is disappointing for us, but also disappointing for the players.
"We know where we stand and we have to get on with it. It may be stretching the resolve of the players a little bit, but we've got to go right to the limit and make sure we're not feeling sorry for ourselves because we've lost three players through injury.
"We've just got to accept that's the position we're in. It's up to us to make the best of it."
He added: "I think it is frustrating for anybody not to get games. With Daniel and Steven it's been exactly the same.
"They've had their run of games and then they've been injured.
"It's frustrating for everybody - there is nobody that gets any enjoyment out of players being unfit."
Reporters quizzed Dalglish on whether the latest injury news would see first-team chances fall the way of Liverpool's youngsters in the remainder of the season.
"Out of somebody's misfortune always comes good fortune for somebody else," he replied.
"For certain players, they'll be closer to getting a game in the first team than what they would have been if the three lads had been fit."