While Newcastle boss Allardyce believes Capello would be a good appointment, he feels the FA should be looking to the future as high profile English managers become increasingly rare.
Allardyce Verdict On Capello!
Allardyce: "It shouldn't be," Allardyce told Sky Sports News when asked if it was the case that the strongest candidates for the England role and jobs at top Premier League clubs are foreigners.
"If this needs to be the short-term fix then fine, it gets us what we want at the top end.
"But the FA should be doing self-promoting and self-building and they are responsible for all football in this country.
"The reality for them is that, once they have made this appointment at the top end, the main focus should go down to the development of footballers, coaches and managers British or English for us to still have a dream that we can ultimately achieve.
"I'm fortunate. I'm with one of the biggest clubs in the Premier League. It has taken me probably 16 years to get to this level.
"We can't allow the young managers below to not have the dream of being able to manage a top club in the Premier League or manage the national team.
"That is very dangerous and if we carry on like that we will end up losing our identity."