Allen has one year remaining on his Liverpool contract and no talks have yet taken place as Allen reached the Euro semi-finals with Wales after some impressive displays from the 26 year old.
Liverpool signed Allen from Swansea for a fee of 15million in 2012 when Brendan Rodgers was in charge and so far he has struggled to break into the first team under Klopp as the Welshman made just 8 premier league starts last season.
Klopp has confirmed that Liverpool will hold talks with Allen when he returns to the Reds preseason after a extended break and Klopp said he hopes they can reach a agreement when he returns.
“We will find a solution but it’s not done,” Klopp said after Liverpool’s 5-0 friendly win on Wednesday night.
“Obviously Joe Allen is a good player. We never doubted this. He played a good European Championship, like the whole Welsh team.
“We have to make decisions, we have to find solutions. We have to talk to the player, ask the player and think about our situation. That’s how it works.”
Allen was named in the official UEFA team of the tournament after a number of impressive games which helped Wales have a fantastic tournament.