Fergie signed Owen for Manchester United in 2009 and said the striker felt he was thrown in at the deep end at Anfield.
Ferguson said: “You can play too much football, particularly young players growing and developing physically.
“That’s exactly what happened with Michael. He would’ve been a far better player if he’d been allowed to improve technically and develop rather than playing all the time.”
Owen, currently with Stoke City, took part in the 1997 FIFA World Youth Championship in Malaysia with England as a 17-year-old.
Fergie added: “When the England youth team played in that tournament in Malaysia we had two players in the tournament at the same time, Curtis and Wallwork.
“We gave them a month’s rest after they came back from the tournament but Liverpool put Owen right back in the first team.
“And then the following season he played in the World Cup so he never had a summer break.
“I don’t think he was allowed to develop technically, as he himself said to me when I discussed it with him.
“It’s maybe a bit churlish to say that’s the reason he wasn’t better. I think he would have been better technically but he was still a fantastic player.”