Julian Rogers-Coltman, chairman of Ludlow Conservatives, made the comments after Mr Dunne confirmed his intention to step down at the next general election.
Mr Dunne's fellow county Conservative, Telford MP Lucy Allan, has also paid tribute to her colleague, saying he would be "much missed locally as well as more widely in Parliament".
Paying tribute to Mr Dunne's time as Ludlow MP, Mr Rogers-Coltman said his talents were also deserving of more time in government than the two positions he held – in the Department of Health and the Ministry of Defence.
He said: "I would like to express on behalf of Ludlow Conservatives our sincere thanks to Philip Dunne for being such a good MP for so long.
"Philip won the Ludlow seat from the Liberal Democrats in 2005 and has increased his majority at each of the four subsequent general elections he has contested.
"This reflects his outstanding record as a hard-working constituency MP, advocating the interests of his constituents across the political spectrum, motivating others, with conviction and commitment.
"He was a successful minister in both defence and health ministries. I have always been surprised that his obvious talents were not recognised in more senior appointments.
"His role as chairman of the Environment Audit Committee has been pivotal in raising awareness of water pollution and seeking solutions from water companies.
"I would like to wish Philip the very best for his retirement from the Commons, after what will be two decades of service."
Ms Allan spoke of her colleague's support as she began her life as an MP in 2013.
She said: "Philip is one of the most decent and well respected Members of Parliament there is.
"He’s a dedicated constituency MP and has always been a role model to me.
"From my first weeks in Telford back in 2013, he supported me and showed me the ropes, for which I will always be grateful.
"He will be much missed locally as well as more widely in Parliament. I wish him all the best with his next steps."