Speaking in Zoo Magazine, the Newcastle boss insisted Benitez would have lost his job by now for his failure to win the Premier League had he not guided the Reds to two Champions League finals.
But Benitez has hit back and told Allardyce to mind his own business and concentrate on his own club.
He told Liverpoolfc.tv: "I want to say two things. Firstly, I think he should be more worried about his own business because he must have more problems than to waste time talking about other managers.
"Secondly, has he forgotten Liverpool winning the Super Cup, FA Cup and Champions League as well as reaching another Champions League final, a Carling Cup final and twice finishing third in the Premier League? Maybe he doesn't have a great memory."
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Full time:
Rafa 5-1 Alladyce