Capello guided England through a near-faultless qualification period for the 2010 World Cup before they flopped dramatically in South Africa, struggling through a weak group before exiting the competition with a humiliating second-round hammering by Germany.
Redknapp, the man who is overwhelming favourite to succeed Capello after the Italian's shock resignation on Wednesday, thinks the former Real Madrid manager had the players at his disposal to bring home the country's first World Cup since 1966 two years ago.
"I thought South Africa was our best opportunity to win the World Cup since 1966," the Tottenham manager said.
"That was my honest opinion. I really could see us winning it. I thought it was a fantastic squad of players but it was really disappointing."
The Football Association drew up a shortlist of potential replacements for Capello on Friday and having turned Spurs from relegation candidates to title-chasers within a little over three years, Redknapp is the clear favourite.
However, despite rising speculation that an announcement might be imminent, Press Association Sport understands that is not the case.
As they stressed on Thursday, the FA want to take their time to ensure they get the right man.
Internal discussions will continue this week but with Stuart Pearce already confirmed as interim manager for the friendly with Holland at Wembley on February 29, official duties would not have to begin until the end of the season anyway.
That would certainly be beneficial in any recruitment out of the Premier League, where every place is vital, even if it is only for financial reasons.
The FA are anxious to stress no individuals, representatives or clubs have been contacted as yet, and there are no immediate plans to do so.
It would still be a major surprise if Redknapp was not the first choice though.
The 64-year-old admits it would be heartbreaking to leave Tottenham, but made it clear on Friday that he considers the post of national head coach as the "ultimate" position for any Englishman.
An air of pessimism surrounds the England team's chances of winning this summer's European Championship but Redknapp insists there is every reason to be optimistic about the country's chances of success, particularly due to the experience and strength in depth the country has in midfield.
"There are good players in England, good young players here, for sure," Redknapp added.
"Frank Lampard's still a top player and Stevie Gerrard's still a world-class player.
"There are some good English players in midfield still. I bent over backwards to get Scott Parker in the summer.
"And let's be honest, you'd love to have Paul Scholes in the Euros this year.
"He'd be in your team, he's that good. You'd love him to play. He plays like a Spaniard, he can play like Xavi, like (Andres) Iniesta, he doesn't give the ball away."
Should Redknapp take over, he looks set to appoint either Parker, or Liverpool captain Gerrard as national skipper.
"Scotty could do it for sure, so could Steven Gerrard," Redknapp said.
"Scotty is a fantastic boy, he's a family man, he loves his football, he trains well, he plays well, he gets on with the job, he's not a minute's problem.
"He's not a Billy big-time. He's just a great boy and that's what you need in your football club if you're going to do anything."
West Brom manager Roy Hodgson, Sunderland's Martin O'Neill and Real Madrid boss Jose Mourinho have also been mentioned as potential candidates for the job.
But the FA must have been licking their lips at the prospect of putting Redknapp in charge of the national side.
Redknapp's men easily brushed aside Newcastle in a ruthless 5-0 hammering to keep Tottenham close to the two Manchester sides currently setting the pace in the Barclays Premier League.
Spurs played at almost breakneck speed to kill off the Magpies, with Gareth Bale, Emmanuel Adebayor and Luka Modric all looking extremely menacing with their pace and creativity on the break.
Redknapp admits it will be a challenge to replicate Tottenham's playing style at international level if the FA come calling and he decides to take the job.
"There's a big difference in the pace we play at in the Premier League and with England, it's a slower game," Redknapp said.
"The opposition tend to keep the ball and play at a different pace.
"Our game in the Premier League is all about a high tempo, moving the ball quickly, as we did tonight, and playing with real tempo in your game."
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