The Rovers favourite, 29, is making a late bid for Three Lions boss Capello's World Cup squad with six goals already this term.
He said: "I wasn't joking when I said Dunn should play for England.
"When he is on the field there is no better player to watch. He is such a fantastic passer of the ball he almost seems Spanish, like a Xavi or an Iniesta.
"Technically he is very good but at the same time he still has that English mentality never to give up."
Dunn has one England cap, won back in 2002.