The Upton Park club fell behind to Maya Yoshida's eighth-minute header, before Matt Jarvis beat the offside trap to level.
Carlton Cole soon added a second for West Ham, and Nolan secured three points for his side in the second half with an acrobatic overhead kick.
Allardyce was full of praise for Nolan, who came in for criticism after picking up red cards against Liverpool and Fulham earlier in the season.
"What I like about him is the fact that he's gone about his job and made sure that he pays back everybody at the club for what happened," said Allardyce.
"It was the lowest point of his career I think, because it was not just one sending off, it was two in a short period of time so the contribution now is massive.
"It was a great contribution in the first goal with the pass he made, which was a top-quality pass at this level to split open a resilient Southampton defence open.
"So long may it continue. Feeding off the front-man is Kevin's quality and everyone talks about it being with Andy Carroll, but he hasn't been here for a while and Kevin's still feeding off the front-men and the balls going in the box.
"He didn't have to worry about games; he didn't have to worry about captaining the team and the organisation that normally brings; he just had to worry about himself and reflect on what he'd done and he's come back with a massive bang."
Allardyce was also impressed with Jarvis and West Ham's overall display as the club claimed a fourth successive league win.
"Matt made a big contribution when we needed it. Goals are beginning to spread around the team now and from all over the place, which is very good, and if we keep our defensive resilience everyone's going to find it very hard to beat us."
