He told the Sunday Sun: "It's sad from an Englishman's point of view.
"It's another dream that has been taken away from Englishmen who start out as footballers hoping to play for England, or as a coaches or managers to try to manage England. Young English managers from below looking up must think: 'Is it all ever going to be worth it?' At the moment, it doesn't look that way.
"And you've got to be able to look above you and have a dream or an ultimate goal. The way it's going, with more foreign owners coming in, we are left with all the top jobs apart from Sir Alex Ferguson's left in foreign coaches' hands."
Allardyce admitted: "Capello has a great CV. You can't knock that. But the only reason no English manager has one is because they have not been given the chance and the opportunity at a top club.
"When a young Italian manager starts in Italy, or a young Spanish manager starts in Spain, or a young Dutch manager starts in Holland, they are the ones promoted through their own leagues and given chances at top clubs.
"Like Jose Mourinho in Portugal, Rafa Benitez in Spain, Arsene Wenger in France . . . those countries will self-promote, but we won't do that here. For an English manager to get into the Premiership, about 98 per cent of the time it will be by getting a club promoted there.
"Nobody since David Moyes and Paul Sturrock has been plucked out of the lower divisions. Everybody else has had to take their club from the Championship into the Premiership and then go from there."
But Allardyce added: "I'm fortunate enough to be at one of the top clubs in the Premiership and it's taken me 12 to 15 years as a manager to get here.
"Hopefully, I can bring success to this club to give every English manager below hope that their dream can come true."