Mullery is concerned clubs in England are more concerned in recruiting big-money signings than nurturing talent through the ranks.
The Sky Sports pundit believes standards are slipping as a result, with other nations suffering a similar fate with clubs looking for quick results.
Mullery came through the ranks at Fulham with World Cup winner George Cohen and was part of the England squad that reached the quarter-finals of the competition in 1970, but he has concerns that no young English players have come to prominence since Wayne Rooney broke into the Everton side in 2002 as a teenager.
"If you've got good players, you’ll have a good team," Mullery said. "If you've got average players, you'll have an average team. And if you've got poor players, then you go out just like Brazil did, to be fair, because their players, other than two decent players they had, were pretty poor.
"And you saw it, they were absolutely wrung to bits by Germany, which was absolutely fantastic to watch but very hurtful as far as the Brazilian players were concerned.
"But when you look at it, we’ve got to start doing things that we haven't done for years. The biggest problem we've got - and it is no disrespect at all to anybody - but we have so many foreign players in this country now that our younger people don't get the opportunity to come through as early as I did, as early as George Cohen did playing for Fulham, in the team by the time you're 17. Wayne Rooney is the only one recently over the last sort of 10 years to get into somebody’s team at 17 years of age.
"We don't see that anymore. And yet many, many years ago it happened regularly. Where now, you know they're quite happy, the people in the Premier League to go out and buy players that are already renowned to play and they'll spent £30-£40 million on a player that’s coming through but not necessarily English."
And Mullery insists the quick fix extends to managers as well, citing the experience of David Moyes at Manchester United.
Moyes was sacked eight months after filling the post vacated by Sir Alex Ferguson after 27 years at Old Trafford, and he will be succeeded by Netherlands coach Louis Van Gaal, whose team finished third in the World Cup.
Mullery said: "You've got to have instant success in the Premier League. Look at poor David Moyes last season. Alex was there for 25 years winning everything in sight. David went in there and it was a nightmare for him to go through it. So, if you don't do the job you’re out and you’re on your way.
"I think Van Gaal is a very, very good idea to bring him to the football club because he's a renowned coach the way he is. David Moyes was an excellent coach but it still never worked for him. So what you're looking for is immediate success and if you don't get that you're out the door."
Despite England's early exit from the World Cup, Mullery believes there are some positives for manager Roy Hodgson, such as the emergence of Adam Lallana and Luke Shaw, who played in the final Group D match against Costa Rica.
Mullery added: "I think you can look at Luke Shaw, it was great example to let him play in the last game and he now knows what a World Cup is about. He could play in two more World Cups. He's a 19-year-old boy, he looks a very good player. Lallana as well, Adam Lallana, he's a very good player.
"But there are only two or three. We haven't got an influx like the Germans, who had eight in the World Cup coming from four years ago. We haven't got that type of player to come through."