Neville was part of Stuart Pearce's coaching staff in Israel for this month's Euros flop.
He said: "Our U-21 players aren't playing enough quality football early enough.
"I got my experience at 18. Our lads now are 21, 22, 23 and a lot of them still aren't playing and getting the rigours of 40 or 50 games a season.
"When I was 21, I'd travelled the world playing football, playing three games a week, so my body and mind were battle-hardened.
"A lot of the kids now aren't battle-hardened until they get to 27 - and that's too late. We'll have missed another generation of international footballers.
"Before I went to the tournament, I got emailed a list of all the squads.
"Part of me felt then that we have got no chance at this tournament. I didn't say anything, but I looked at the Dutch list and the Spanish list and the number of full international players they had.
"People say it's easier said than done, but the Spanish, Germans and Dutch do it.
"We've hopefully got a World Cup in a year's time and a lot of players who didn't come with the U-21s won't have been to a tournament before, whereas five or six Spanish players who won the U-21 tournament will be in Brazil."