Hodgson told fulhamfc.com: "I think signing players in the summer is going to be difficult for a lot of clubs. We’re in a recession and clubs are looking more and more at what’s going on around them.
"We’re seeing many clubs, big clubs like Southampton, in grave difficulty and I think that’s going to colour everyone’s view of transfer policies and wages during the summer. So it’s not going to be a simple question here of opening a treasure chest and throwing money left, right and centre and appealing to any players that are available.
"We’re going to have to work very hard to identify players that will be good enough to come to the Club and then work hard to persuade them that their futures are here. That’s been an ongoing process for some time now and I’m sure it’s going to be a busy summer.
"We've simply got such a small squad at the moment that will become smaller when Olivier Dacourt retires or goes back to France and Giles Barnes returns to Derby County.
"The squad we have at the moment, which is barely 20-man strong, will automatically be reduced even further. We need more players to strengthen and reinforce our squad. I’m hoping that we’re going to be able to identify the right people and the Chairman will see fit to bring them into the Club."