Allardyce was upset with the consistency shown by Anthony Taylor during his side's 2-1 defeat at home to Everton last weekend where he saw both striker Carlton Cole and Toffees' midfielder Darron Gibson dismissed.
Both red cards have since been rescinded but Allardyce said the introduction of more trained officials can improve the standard in England.
"There's not enough referees," he said. "If there's more referees, there's more competition. If there's more competition there's more competition for your game."
Despite having two of his key decisions overturned at Upton Park, Taylor will be the man in the middle for Liverpool's trip to QPR on Sunday and Allardyce believes a referee sitting out for a week following a bad performance would also help their development.
He said: "A referee hates not refereeing on a Saturday. The biggest punishment for a referee is not to be refereeing on a Saturday - like a player not to be playing.
"They love it. They enjoy doing what they're doing. They're professional now and they're full-time. But if we have more high quality numbers and more professional referees, and you look at fatigue, which I think there's a problem now.
"I don't think a referee can be rested or left out at the moment, and that's one of the problems."
The successful appeal against Cole's ban means Allardyce can name the former Chelsea forward in his side for Saturday's trip to Reading.
With Andy Carroll still sidelined with a knee injury the inclusion of Cole is key for West Ham, who are still without Mohamed Diame and have Jack Collison, Alou Diarra and Ricardo Vaz Te all lacking match sharpness.
Yossi Benayoun had been struggling with injuries since moving to West Ham on loan from Chelsea at the start of the season and the Israel international has now returned to his parent club.
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- Carlton Cole