Walker was handed a call-up to the England squad by Three Lions boss Fabio Capello for the clash with Denmark on Wednesday.
The 20-year-old made an energetic and pivotal perfmance in the 2-2 draw with Fulham on Saturday.
“He showed some international quality on Saturday because he is fast and he is quick, he can defend and he can burst through and his use of the ball is good,” Houllier said.
“The full-backs in modern football have a lot of the ball because usually they [opponents] press the centre backs and pass the ball to the full backs, so they need to be good footballers.
“[But] he is not the finished article. The U21s is his level, for me.
“Glen Johnson is ahead of him. This is his first experience in the Premier League and he’s got to build on that. At times today a couple of crosses could have been better.”