Liverpool had agreed personal terms with the striker this summer having bid £8.5m for the France international - but they pulled the plug at the last minute, reportedly over medical concerns.
Redknapp expressed his surprise at that turn of events, and now insists Liverpool would have got a bargain had the deal gone through.
"We hope Loic will stay," Redknapp said. "He is a fantastic player and his attitude since he's come back here has been first class. He's trained great and we're hoping he's here at the start of the season. We don't want to sell him.
"If you look at the prices of strikers at the moment, it's incredible. To me he should be a £20m striker in comparison to other strikers who are getting sold for £11m or £12m. To have lost him for the amount we were going to would have been too cheap so to have him back here is fantastic.
"The chairman wants him to stay and we hope he does. He would have been a fantastic buy for Liverpool at that money, so their loss is our gain.
"We've got Charlie Austin, Loic and Bobby Zamora, so we've got three strikers. In an ideal world you'd like one more but we are not close to doing any other business at the moment."
One man who seems certain to be heading for the exit door is Adel Tarrabt, but Redknapp insists he will have to get himself fit first.
The Moroccan international spent last season on loan at Milan, and Redknapp said: "I don't know what he's going to be doing to be honest, but he's not fit.
"He's a good player when he's fit. I think he's looking to move so we just need a club to come and pay the transfer fee that the chairman has put on his head. I wish him well he's a good lad, but he needs to get fit to play whether it's here or somewhere else.
"He's probably not done one day's full training since I have been back here. He's a player who needs to do a couple of weeks of physical training to get himself up to speed."