Sweden face England tonight.
"If you look at the players that they've got, they should be up there amongst the favourites for each tournament they've been in," Larsson said.
"But, at the same time, the pressure might become a little bit too much. Maybe they shouldn't be the top favourites for each an every tournament, the way they're maybe pictured to be in England sometimes."
Any notion of England being able to go toe to toe with the world's best appeared to be dispelled by Saturday's shock victory over Spain.
Fabio Capello's ultra-cautious approach ultimately paid off but it also showed up the gulf in class between his side and the world and European champions.
Larsson said: "Sometimes you've just got to be honest and say, 'Listen, we're playing Spain, they're one of the absolute best teams in the world at the moment and maybe we have to change our game to beat them'."