The Scotland international hasn't been seen for the Baggies since the 1-1 draw with Stoke at the end of February, twisting his ankle in the last training session before the win over Birmingham.
Scans showed Dorrans hadn't damaged ankle ligaments but it has taken the 23-year-old a bit longer than expected to recover from the injury.
Hodgson is hopeful Dorrans will be available for first team selection shortly but stopped short of putting a timescale on when he might return for West Brom.
"Graham is improving," the Baggies manager told the Birmingham Mail.
"It's positive but we can't put a date on his return.
"At the end of last week it looked less positive than now which is good news - in three days we're stepping in the right direction."
Hodgson went on to confirm that Peter Odemwingie and Youssouf Mulumbu are both fit for Saturday's clash with Liverpool, while James Morrison and Paul Scharner should also be fine for the visit of the Reds.