Goodwillie rejoined United on an initial six-month loan deal earlier this month - two years after leaving for Blackburn for a seven-figure sum.
He netted just five goals in two frustrating seasons in Lancashire, but Houston believes Rovers never made the most of the Scotland international's potential.
"In the two years before he signed for Blackburn, he was scoring almost every week in the SPL," said Houston. "He was scoring different types of goals, he was working hard.
"He's always been a great trainer, he works really hard in games and he earned himself a move to Blackburn in the Premier League.
"However, at that time, they were a struggling side when he joined them and he never got the opportunity to start 10 games on the trot.
"I think David, given the opportunity, could still play in England at a very high level in my opinion.
"But, for United in this period of six months, I'm sure he will score plenty of goals for them.
"I'm sure it's given everybody at United a boost - certainly the supporters who deserve it.
"The young players will learn a lot from him because I still think he's a top player who hasn't been given a proper opportunity in England."