Pallister insists the 32-year-old still has much to offer both the Reds and the Three Lions.
"Most definitely you don't write Rio off," Pallister told the Manchester Evening News.
"People have been writing Rio off for about 18 months now but he's still a top class defender. He's stylish and silky and still top drawer. He still looks a fantastic player to me.
"I think Fabio Capello would be a fool to continue to overlook him. I am sure he will be looking at him as an important member of the squad for Euro 2012 if and when we make it to the finals next summer."
Ferdinand will be 33 next month and Pallister says that 30-somethings get a raw deal from the critics.
"It seems you cannot get away with a bad game when you are over 30 years of age," added Pally.
"At 21 you can have a poor match and nobody bothers. You can do the same at 26 or 29. But get to 31, 32 or 33 and suddenly everyone is saying 'Your legs have gone'.
"It has been the same with Frank Lampard this season. He's 33 and because he's not been playing as regularly as he did at Chelsea suddenly the critics are claiming he's finished for his club and England.
"What does he do? He scores a hat-trick at Bolton last weekend and nobody is on his back anymore.
"Rio seems to be going through the same critical process. But he'll have seen it all before with other players. He's long enough in the tooth to know how it works, no matter how wrong it is.
"He's well aware what the media can do. But he's old enough and has big enough shoulders to brush it all off and come out fighting."