He insists Grealish is a much more complete player now, despite contributing just three assists and three goals after his £100m move from Aston Villa last summer.
"It's interesting that I spent the whole summer getting hammered for not picking him, now I'm being told I shouldn't be picking him. But that's my world," said Southgate.
"That's quite transient with lots of different players. I imagine there would have been some anxiety about going there and not winning a trophy.
"He's now done that so I'm sure he'll feel a little bit calmer. He would have hated the accusation that he had gone there and not won anything.
"He's learned a lot positionally. Tactically, his working without the ball has improved over a period of 18 months.
"At Villa it was quite unique, he was the one who gave them hope, got them up the pitch, had total freedom with what he did.
"It's a very different ask at this club, more aligned with what we've asked him to do. He is that free spirit, as we've seen over the last 48 hours, that just wants to enjoy his football as well. He is what he is.
"If you'd said to me he's not going to score 20 goals this year, I wouldn't have expected that. He's the one who likes to be the provider, who might play a pass before the assist, he's a different type of player.
"Whether he adds getting on the far post, like Raheem [Sterling] has done over a number of seasons, maybe he will, maybe he won't, but I don't know if that's how he's wired. He gets as much enjoyment out of creating as he does scoring."
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