Many fans were expecting the attacking midfielder to get the chance to show his quality with the senior national team.
Grealish has had a hand in eight goals in 12 games in all competitions for Villa this term.
Speaking about Grealish, Southgate was honest in saying that he missed out due to competition for places.
"He's a very good player," said Southgate in his press conference.
"I've watched him closely this season.
"The reality of that is that he's up against [Raheem] Sterling, [Marcus] Rashford, Hudson-Odoi, [Jadon] Sancho in those wide areas.
"I know he can play as a No 8 but that's not where Villa have played him in the last six or seven weeks when they've been getting their results. So, the competition in that area is a really high level.
"I've worked with him with the U21s, so I know all about him. He's very close. He's just got to keep playing the way he is, and if we had issues over the weekend, I wouldn't hesitate to call him into the squad."