Torres set up Chelsea's first goal and then scored their late winner in a 2-1 victory over Manchester City at Stamford Bridge on Sunday, following up his brace against Schalke in the Champions League in midweek.
Neville believes the Spaniard is starting to look something like his best again.
He told Sky Sports' Super Sunday: "Torres deserves credit. So many times we've seen Fernando Torres not be a handful in the game, not be somebody who's a danger to the opposition.
"He missed a big chance (against City), but his recovery was big. In that next seven or eight minutes he lifted the crowd, the crowd responded to him and that is what centre forwards should be doing.
"To still be on the pitch at the end was a big vote of confidence in his performance, how he played and the work-rate he put in.
"I know that Jose Mourinho said that he's worked hard from day one for him, but I have to say in these last couple of years we've seen a lot of him and his body language has been a little bit down at times, like he's not always been happy. Maybe its confidence, maybe he couldn't get any lower, he's just working his way up.
"You've got to give Mourinho credit because (Rafa) Benitez was signed to get the best out Torres but this was the best we've seen from Fernando Torres in three years, without a doubt."
The win lifted Chelsea to second in the Premier League table and Neville believes Mourinho it could prove crucial in the title race.
"Mourinho can navigate his way through a season. You get the feeling with him he knows how to win a league, I think he's important at times," Neville added.
"It was a big moment today because it will give them the confidence.
"You need to win big matches and I feel that Manchester City were definitely worthy of a draw, but for Chelsea to come away with a win is a big moment."
He is back on fire again, he even looks much quicker back to his old days. Has the training under Mourinho improved his sharpness and pace looks like it has. He even looks much stronger than at anytime in his career looks like he's bulked up, its nearly like a new signing for Chelsea this year, and to think he was nearly on his way out of Chelsea or so the papers would have you believe he was going to Napoli at one stage.- keano81