The 21-year-old midfielder made 52 appearances for the club last season and has missed only one game to date this season as well as establishing himself as England's most-capped international at Under-21 level.
Toon Winger Facing 'Burn Out'?
Allardyce: "James is so enthusiastic about his game that we actually have to stop him doing stuff, and that's always a problem.
"It's quite a nice problem, but it is a problem because, at the end of the day, a young man of his age can still burn out mentally as well as physically.
"With the amount of games he played last year and then going into the European Under-21 tournament in Holland, he has had very little time off.
"We are always holding him back, we are always sending him in because we want him to get enough rest.
"James Milner's progression has been fantastic, but my side of it is the vast amount of games at 21 years old he has played.
"While he might look physically capable of doing that, I have to be aware of the burn-out situation.
"I am treating him very carefully at the moment and trying to get him to understand that, even as young as he is, one of the most important things is rest, not training, because the extra training could have a negative effect in the end.
"The rest and plenty of sleep with the amount of games he has gone through would be more beneficial for him than too much training.
"He is a terrific prospect and a lad who has come through the mill here.
"The club has tried to discard him twice - they loaned him out once and then tried to sell him the second time.
"He was maybe not so well-liked by the fans to begin with but, all of a sudden, he has come through all that. And although he is still only 21, he is performing in the Premier League to a very high level.
"People have forgotten just how young this lad is, but he has got vast experience in the Premier League now which means, in two or three years, he could be a really top player."