The Netherlands international has faced questions about whether can rediscover the form which arguably made him the world's top defender prior to a knee ligament injury in October 2020.
However, there are signs the current Reds skipper is edging closer to his best with his commanding performance in the weekend's Merseyside derby win over Everton another indicator of a return to his previous high level.
"He is one of the best in the business in the world," Hyypia told the PA news agency at a Nike Game On initiative which, in conjunction with the LFC Foundation, has provided more than 8,000 local schoolchildren with access to a range of sports. "I think he has raised the standard with everyone expecting him to play at that level every time and that is very difficult.
"But he is doing well, he is a big part of our team and a big leader of the team so I think we all need to be patient and his best is coming.
"I think this season he has shown in some games he is still at the level and I have no doubts he will be the best centre-back in the league this season."
Despite their good start to the season there has been scrutiny on Liverpool's defence, with right-back Trent Alexander-Arnold now operating in a hybrid midfield playmaker role in possession and opponents seeking to exploit the space in behind.
The focus is likely to intensify following the news left-back Andy Robertson will be sidelined for three months after shoulder surgery, with Kostas Tsimikas having to deputise.
But Hyypia has faith in both Liverpool's full-backs, adding: "Trent is like a midfield player. He can pass short and long and has the vision to see the passes.
"I think this role suits him well and when he is in the midfield position he doesn't have that big distance to go back defending when we lose the ball."
On Tsimikas, the former Finland international said: "I think he will get a lot of responsibility now and he has his chance to show what kind of player he is.
"Hopefully he is courageous and takes his chance. If that is not going to work then Jurgen (Klopp) needs to think of something else to solve the problem but I have confidence in Tsimikas that he can do the job."
Having come through a testing set of fixtures Liverpool sit fourth in the table. With games to come against Nottingham Forest, Bournemouth and Luton - all teams in the bottom six - and Brentford before a late November trip to Manchester City, Hyypia believes the platform has been laid for another title challenge.
"The ambition is to win the league," he said. "As long as we are competing until May to be the champions I think we can say we will have had a successful season.
"The top four is always the minimum target to reach but everyone wants success and some trophies this season.
“It would be foolish to look at what the others are doing. We just concentrate on what we are doing and do what we do best and then we see what the result is.”
The first three years of Game On programme, funded by Nike and delivered by the LFC Foundation, has engaged more than 8,000 children – including 950-plus disabled and 1,000-plus ethnically-diverse participants – aged between seven and 12 and 46 grassroots sports clubs with coaching delivered in 15 different sports.
“Game On is about using the power of sport, Nike and Liverpool to engage local young people in sport – unusually for us not football,” said LFC Foundation chief executive Matt Parish.