The pair fell out last season when Souness criticised his attitude and lifestyle.
The fall out led to Dunn leaving his hometown club in the summer for Birmingham, but the England international revealed the pair have put their differences behind him following the first meeting between the two sides this season.
Dunn and Souness come face to face again this weekend in the third round of the FA Cup and there is no rift between them now.
"He came to see me in the dressing room and said 'keep your head up'. It was a nice touch and I appreciated it," said Dunn.
