Flanagan made the move to Turf Moor in August, after signing a new long-term contract with Liverpool months earlier.
Facing competition from the likes of Stephen Ward and Matthew Lowton, Flanagan has been unable to pick up the rhythm required after 20 months out injured from the end of 2013/14.
“We’re always monitoring our situations. Not just for Patrick but all of the players,” he said.
“Football’s changed, it’s not just on the pitch now, there’s lots of different management things you need to look at and monitoring their contractual situation.
“Whether it’s a loan player, a player under contract or your contract needs extending, there’s a lot more that goes on than just people think.
“We’ll monitor [Flanagan’s] situation and him with us, there’s always their angle as well, it’s not just mine.”
Dyche’s desire to assess both sides is a sensible one in Flanagan’s case, as terminating his loan deal could well suit all parties.
For Flanagan, the lack of game time is seeing an already slow-moving career stagnate, and the 24-year-old has not played regular football of any kind in two-and-a-half seasons.
This has stunted his development, prompting a frustrating drop down the ranks under Jurgen Klopp at Liverpool.
With the Clarets battling the drop this season, the January transfer window may prove pivotal for Dyche, and bringing in further quality in the loan market could help him stave off relegation.
If this is the case, and Flanagan returns to Liverpool, it is unlikely he will join Klopp’s first-team squad, with Trent Alexander-Arnold emerging as cover at right-back.