Neville understands why Hodgson decided to take John Terry and not Ferdinand.
"It was probably one of the biggest decisions Roy had to make," Neville said.
"We are in a state of transition at the moment. We are all hoping we can improve this England team and get better results.
"To do that you have to start blooding the young players.
"To take both of them (Ferdinand and Terry) probably would have been the wrong decision looking forward to the next major championships.
"What probably went in John Terry's favour was that he has been a regular for England in the last year."