The former England skipper has questioned the jaded team spirit and tactics within the England camp during the World Cup finals.
Shearer said: "I cannot be accused of being anti-foreigner just because Capello has failed to take us beyond the last 16.
"I have said since the appointment of Sven-Goran Eriksson that the England team needs an Englishman in charge. We have brought in overseas coaches with lots of the right qualifications and a long list of achievements at club level. But they have brought little to our national team.
"The best England team I played in was the one under Terry Venables before Euro 96. Terry's knowledge and tactical know-how were spot-on and he knew how to get the best out of us too.
"We responded to him, believed in him and played some outstanding football in that tournament. The fact he was English was no coincidence. Glenn Hoddle had the same impact to a lesser extent.
"They both knew how to create a positive attitude and the right tactical framework."