Agger's damning indictment came as he looked for reasons for ex-Reds striker Fernando Torres' wretched form before his £50million move to Chelsea.
He claimed that all of the club's players suffered during Hodgson's ill-fated reign.
Agger said: "That is a big question, isn't it? How to explain that. Look at the team - we played awful, we were s***.
"And he is a part of the team, so when everything is playing well, he plays a lot better. It is the same for everybody, for me, for Stevie [Gerrard], it is the same.
"When the team are performing, when you look at every single player they are playing better. But when we are losing, everybody is on top of us, everybody is playing bad."
However, Agger insists that Kenny Dalglish's revival as caretaker boss has given the squad hope of reaching the Champions League next season.
The Denmark international is also enjoying his own football again after it appeared he may have been on his way out of Anfield under Hodgson.
"I had injuries. I have played a few games in a row now and have started getting the feeling back of playing football," admitted Agger.
"I have been in England now for five years and I know it is a tough, demanding game. I think I am the first to say how annoying it is to be injured but it is a part of me and I have to adapt to that and give everything when I am fit.
"I played the last game and I think that is where it started and we began to play really well. A big part of it is Kenny and [assistant] Steve Clarke. They have made a major difference. But it is also something to do with confidence, because it is the same footballer.
"Confidence can win you games and somehow Kenny and Steve have put the confidence back in the players and I think we have shown that definitely in the last four games. It is looking good, but there is still a long way to go.
"Kenny is a positive guy and he is, in football terms, positive. First of all, because he likes to play positive football, going forward, and keeping the ball on the ground and I think he is good among the players.
"The training sessions have been really good and I think everything starts at the training ground. If you can get that right you have a big advantage in the games.
"What Kenny has said... I think we will keep that inside Melwood. I think he is just himself - his ideas and Steve's ideas fit together. It is difficult to say. It is strange - as I said before, it is the same players.
"It is a six-point gap from the top four, with a game in hand. We are on a good run with four straight wins and if we can continue playing the same way, with the same confidence, I think we can get close. I don't know if we can get in there.
"Everybody at Melwood agrees, and it sounds simple and stupid, but we have to take every single game and see where it takes us.
"I know that is the standard answer, but if you start to look ahead and count the games left and how many points you can get, you lose your focus."
Agger refused to be drawn on Torres' elbow into his face during Liverpool's win over Chelsea as the £50million man's Blues debut turned into a nightmare against his old club.
But the defender believes Liverpool's own new players - Andy Carroll and Luis Suarez - will come good and help them forget the Spaniard.
"There is no reason to comment on that [the elbow]. It is football - a contact sport," said Agger. "All the Liverpool players wish him all the best. Liverpool got a lot of money for him, so why shouldn't we wish him all the best?
"If the player doesn't want to be there any more, there is no reason to keep him. I think everyone at Melwood liked him and still like him because he is a good guy and wish him all the best in a blue shirt, except against us!
"It is a big, big gap to fill, but Carroll has shown he can score goals at the top level. We will have to wait until he is fit, but hopefully him and Luis will be great signing for us, because that will be another thing which will help us towards our targets."
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