The 67-year-old Italian led Russia into its first World Cup since 2002, having finished top of their qualifying group ahead of fancied Portugal.
Capello said: Russia are a dangerous team for anyone. Their absence from the World Cup has increased their appetite a great deal.
"I think our level is the top eight of the event. Let's say that I want my team to reach the quarter-finals."
Russia fell four places down to 19th on the latest FIFA/Coca-Cola World Ranking.
That means Russia will not be among the seeded teams for Brazil 2014 and will face at least one of the world's top teams in the group stage.