Liverpool locked down boss Klopp to a new deal in the summer running until 2022.
That was despite the German only being appointed at the Anfield club in October 2015.
Liverpool’s title challenge has ground to a halt since the turn of the year and yesterday’s 2-0 defeat to Hull sees them drop 13 points off league leaders Chelsea.
They also lost the League Cup final and Europa League final under Klopp last season.
Liverpool player ratings against Hull
Sat, February 4, 2017
Express Sport brings you Liverpool's player ratings from their defeat to Hull
Liverpool FC via Getty Images
1 of 11
Simon Mignolet – 5
And Hamann says the Reds board should have focused on other things rather than Klopp’s long-term future.
“Jurgen Klopp came in and he changed the perception in the city and the football club,” Hamann said on MOTD2.
“He gave the players and fans a bit more common sense. Because at Liverpool people are either ecstatic because things are going well or they are almost suicidal because things are not going well.
“It’s either black or white in Liverpool.
Get Quotes on Home Insurance
Liverpool manager Jurgen Klopp signed a six-year contract last summer
Klopp's (right) Liverpool lost 2-0 to Hull on Saturday
Liverpool have slipped to 13 points behind Chelsea
“He gave them common sense and he made an impact when he came in.
“But if you look at the pure facts I don’t think the points average has improved dramatically since Brendan Rodgers (was sacked).
“You get to two finals, you lose two finals. I think they both should and could have won – especially the second one against Sevilla (in the Europa League).
“That would have had a huge impact as they would have been in the Champions League.
“They have probably made a decision with their heart and not their heard by extending the contract by another four years.”