Shilton also thinks that Hart's exit from City will make competition for the gloves even more intense in the England national team.
"I've never felt he is as good as a lot of people thought he was," he said.
"Obviously he's a good keeper but although he has great games, a keeper is judged by the amount of mistakes he makes and those have happened right through his career. In the Euros he made two mistakes in three games.
"What I don't understand about Joe is that he has 60-odd caps and yet people were saying he was getting too wound up before games in the Euros. If you don't know what you're doing after 60 caps, there is something wrong. I thought he was too wound up but apparently that is his style.
"He's under pressure now and he's come back to the pack. Joe was always looked upon as the No1 but now there is competition.
"It's all to play for now. It's up to the other keepers to make the shirt theirs.
"You need three or four keepers to choose from and then Sam makes his choice from there and stands or falls by it."