Not sure which version of Inferno you've read, but Dante absolutely included Saladin in hell. In Limbo, the most shallow and easygoing part, admittedly.

There are pretty much two categories of people Dante used as examples in Inferno. Historical and biblical figures he felt were important, and people he felt had personally wronged him. Saladin falls into the earlier category, and is placed in Limbo among those who predated Jesus and so could not be Christians and those who chose not to worship him, but still led virtuous lives.

Other people Dante encounters are his poetic idols, Homer, Horace, Ovid, Lucan, and of course his guide, Virgil. They appear only because of their important to Dante himself, not because a story about Hell particularly needed the great poets of antiquity in Limbo. Besides his writer buddies, Dante also places important figures from Roman and Greek history, such as Julius Caesar and Aristotle, and mythology, such as Hector and Aeneas (as Dante believed 100% in the legend that the people of Rome descended from survivors of Troy, as written by Virgil in the Aeneid). Saladin is one of several post-Christian figures found among the "virtuous heathen", which also include the 2nd c. Roman mathematician Ptolemy, the 10th c. Persian physician-philosopher Avicen (Ibn Sina, usually latinized as Avicenna) and the 12th c. Andalusian Muslim thinker of all trades Averroes (Ibn Rushd).

But back to your main question of why Dante considered Saladin a "virtuous heathen". I'm not up to date on contemporary accounts of Saladin, but by the 13th century and had a reputation in Europe for being a great warrior for his victories, and as a generous enemy for giving the defeated crusaders an uncommonly cheap ransom for their release, amnesty, and free passage after his capture of Jerusalem (in actuality this was in exchange for the besieged crusaders releasing thousands of Muslim hostages and not destroying Muslim holy sites in the city). There's a French poem of uncertain origin, dated to approximately 1220, Ordene de Chevalerie, that describes a knight, Lord Hugh (or Hue) captured by Saladin who teaches him the ways of chivalry and the specific steps in becoming a knight, but when Saladin completes his training, refuses to knight him because it would require Hugh to strike Saladin while he is Saladin's prisoner, Saladin in response pays Hugh's ransom himself (whether this was his own idea or Hugh's seems to vary from one translation to another), after which Hugh knights Saladin before returning home and telling everybody he meets for the rest of his days what a great person Saladin is. This seems to be based upon an earlier story of Lord Humphrey, a crusader knight and a vassal of Hugh, who so impressed Saladin in battle that Saladin specifically requested that Humphrey knight him. There's absolutely no historical evidence to show that any of these events or anything remotely close to them actually happened, but it shows the general impression of Saladin in Europe in the centuries following the third crusade and up to Dante's time.