The midfielder scored in last night's Europa League semifinal victory over Eintracht Frankfurt before being substituted ahead of the shootout.
Speaking on BT Sport before the game, Hoddle said that the Chelsea midfielder has got plenty of talent, but still needs a full season of playing time before he can become a great player.
"It's now or never for him," said the former England manager. "Next season he needs to be playing.
"He needs to be playing so he feels the coach wants him in the team, he feels that he's part of the spine of the team. Then we'll see whether he can be a great player or not. I still don't know.
"He's got immense talent, running at people, playing a No 8. He can defend at times, he's got that little bit of pace, a bit of a pass on him, he's got a little bit of everything going for him. He can score goals and create, but it's still an effort for him.
"He needs a full season to learn himself through all the little things you have to do as a young player. He's not that young by the way, we're talking as if he's a youngster, he's not."