The Clarets tried to sign the midfielder in 2019.
Dyche was keen to bring Phillips to Turf Moor in 2019 but the Clarets board at the time were not prepared to meet Leeds’ asking price for the player.
Phillips has since gone on to prove himself in the Premier League and played a key role for England this summer as they reached the final of Euro 2020.
The 25-year-old is expected to line up for Leeds against Burnley at Turf Moor on Sunday and, ahead of the game, Dyche said: “I thought he was a very good player then and I think he’s a very good player now. He’s developed since then and continues to do so, so fair play to him.
“Your scouts are out there collecting information, they are scurrying around, and sometimes one catches your eye. He was one for me, I don’t think my staff liked him as much, but I was strong on him.
“I was quite strong on that one and I thought he would have been a good acquisition for us, but we couldn’t do it. The chairman at the time wouldn’t put the money in that it would have taken. Unfortunately he was out of our price range.
“That’s the way it goes and he’s proven himself. He’s a player who I thought could continue to improve and he has.
“I liked him then and I like him now, I think he’s a very good player who has shown that. It doesn’t need me to say that and he’s shown that.”
Dyche will have Ashley Westwood and Matej Vydra back in his squad against Leeds.
Both players missed the defeat at Liverpool and the penalty shoot-out win at Newcastle in the Carabao Cup with toe and groin problems respectively.
Aaron Lennon will also be available against his former club, having re-signed for Burnley in time to play at St James’ Park on Wednesday night – where he came off just before the hour mark.