The former Three Lions midfielder and manager was unveiled on Wednesday as a member of a Football Association (FA) commission designed to improve the fortunes of the national side.
"It is unrealistic for England to think they can go and win the World Cup in Brazil," Hoddle told BBC Sport. "Let's first qualify, then get the youngsters experiencing a tournament in Brazil so that in two years' time we can have a real go at the EUROs."
Only around 30 per cent of the players currently playing in the English top flight are eligible for selection by England manager Roy Hodgson.
Since winning the World Cup as hosts in 1966, England have only reached the semi-finals of two major tournaments and the commission will investigate the reasons for their recent failings.
England have yet to book their place at Brazil 2014, although they will assure themselves of a spot if they win their final two qualifiers - both at Wembley - against Montenegro on Friday and Poland on Tuesday.
Hoddle was in charge of England from 1996 to '99 and took them to the second phase of France 1998, before the team lost on penalties to Argentina in a match where David Beckham was sent off.