Sullivan and fellow Upton Park supremo David Gold held crunch talks with Allardyce at the end of last season amid regular disgruntlement at a perceived dilution of the 'West Ham way' by supporters.
Part of Allardyce's remit was to secure a top-10 finish and introduce a more attractive playing style to his side, something that has largely been achieved in taking the Londoners to seventh after seven games.
The likes of Diafra Sakho and Enner Valencia have added a vibrancy to West Ham's attack, while Stewart Downing has flourished in a new playmaker role.
Though delighted with the progress made so far this term, Sullivan insists the club will not sway from their policy and Allardyce will have to keep up the good work throughout 2014-15 if he is to earn an extended deal in June - when his current contract expires.
He told the London Evening Standard: "We have a policy - and it's as much for Sam as us - that we sit down at the end of the season, maybe a bit earlier if we're safe, and judge things over an entire season.
"We've always done it that way.
"Last year I was being asked at various times if Sam would be going but my answer was always that we'd look at it at the end of the campaign. We're very loyal to our managers.
"There is a lot of optimism about the place now and I genuinely believe we have the best squad since we've been at the club.
"We've signed some high-energy, younger players and we have discovered the 'West Ham way'.
"That first-half performance against Liverpool [in a 3-1 win] was the most satisfying 45 minutes since we became involved.
"That was the watershed game and full credit to Sam, he changed the style to a diamond formation.
"Sam made that decision so he deserves the accolades because, had it not worked, he would have been castigated."
