Holmes has been in sensational form in recent weeks at his preferred fullback position, after rumours emerged that he may seek a transfer elsewhere to secure a spot in his preferred number one jersey.
The 23-year old was linked to North Queensland, a move that Flanagan ruled out as a possibility.
But Holmes has been in a purple patch of form in his last five games at fullback, running for 200-plus metres on two occasions and ranking second in the league for tries (15) and linebreaks (16).
And the Sharks coach was full of praise for Homes’ recent emergence since Dugan went down with a leg injury.
“He played well in Origin and he came out of it with that confidence, a bit of a spring in his step,” Flanagan told The Sydney Morning Herald.
“The thing I’ve seen in Val (Holmes) is he’s been given the opportunity because of Duge’s (Dugan) injury and he’s done a really good job.
“He’s really matured in that role, we’ve all been hoping that he took those steps.”
After missing the last two months, Dugan is expected to make his return during next Sunday’s clash with Manly.
“If (this week) was maybe a Saturday or Sunday game he might have been more of a chance,” Flangan said.
“Without any hiccups, he’ll be right for next week.”
Flanagan will be faced with a selection dilemma when Dugan is fit and ready to play, and he was not sure of who would would be named in the coveted number one jersey.
“I’ll pick that team next week,” Flanagan said.