Fans of the show - and Allen himself - were angered when ABC announced in May that one of its most-watched scripted series, a solid ratings draw, was to end.
Allen's character, an outspoken conservative, echoed the political positions of the 64-year-old actor, a Republican who attended President Donald Trump's inauguration.
The announcement sparked a firestorm of criticism on social media, with Allen tweeting that he had been "stunned and blindsided" by Disney-owned ABC's decision.
Meanwhile a petition on Change.Org that attracted more than 300,000 signatures claimed the comedy was canceled because it was the only entertainment programme that was not constantly shoving "liberal ideals down the throats of the viewers."
"We have actors on our shows who have all sorts of political views. Tim Allen is a valuable part of the Disney family and has been for a very long time."
She described "Last Man Standing" as a "high quality show" but added that the network had not been able to find room in the schedules for a seventh season.
Dungey was addressing journalists as she introduced ABC's segment at the TCA's annual summer press tour in Beverly Hills, where journalists hear from television producers and stars about their upcoming seasons.
"I can confirm that Dan is still alive," she said, but would not comment on whether other plot developments - such as Roseanne's sister Jackie (Laurie Metcalf) revealing she was a lesbian - would be revived.
Dungey also used her presentation to assuage early worries that the forthcoming "Marvel's Inhumans" won't be up to the standard of the comic book giant's other superhero movies and television shows.
Based on an early version of the first episode made available to reviewers, journalists voiced concerns over the show's look, saying it does not merit an IMAX release.
But Dungey described it as a "work in progress," saying the month before it is due to premiere will be enough time to get it right.
"I can tell you that... The show that you have seen is not the finished product," Marvel Television chief Jeph Loeb added later.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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