Costa has finally been granted his wish of returning to Atletico Madrid, with the player set to move in January when the transfer window re-opens.
"I would rather have Costa than Morata in my team at this moment in time, to be honest with you," Neville told Sky Sports show The Debate.
"I think he is better suited to the English game.
"Morata has great potential, but if you were an opposition manager, you would rather be facing Morata than Costa.
"He is a fantastic player, he scored goals and is someone you would think, 'I'd love him in my team.'"