England scraped through the group stage in South Africa before being thrashed 4-1 by Germany in the second round to register their worst World Cup finals defeat.
"We played the last game in March and the players were in a good situation," Capello said in the Sunday Telegraph, referring to a 3-1 friendly win over Egypt at Wembley.
"But when we played the friendly games before the World Cup, the players were not in the same situation that they were in March. They were not the same, physically, like before.
"We knew the situation before the World Cup. I spoke with my staff but I could not come out and say this because psychologically it is not good for the players.
"When we started to play I could understand when we were tired - in the games against Mexico... and against Japan. Even in the last friendly game in South Africa. The level of the games were always the same and I was worried.
"We tried to do everything. I spoke with the doctors and physios to improve the situation but South Africa was a mentality problem."
CAPELLO APOLOGY
Capello also apologised to the fans who travelled to South Africa to support the England team and said he would have understood if the FA had wanted to terminate his contract.
"I prefer to stay but if the FA decided to sack me, I would have understood it," the Italian said in the Independent on Sunday. "I spoke a lot about the situation but I am a fighter and I never stop in my career. I am always looking forward.
"I thought about different solutions and after I spoke with Sir Dave (Richards, chairman of Club England) I decided to stay because I want to improve and play at the Euros - it will be very important for me."
Capello named his first post-World Cup England squad on Saturday for the friendly against Hungary at Wembley on Wednesday. The squad includes only 10 of the 23 players on duty in South Africa although the core of his World Cup team remain.
"I want to say sorry to the fans who joined us in South Africa," he said in the Sunday Times. "I know they spent a lot of time and money.
"It's possible they will boo on Wednesday but we need (their) support. We have to look forward now to the Euro qualification."
The Hungary match is a warm-up for the Euro 2012 qualifying campaign which begins at home to Bulgaria on September 3.
England also face Switzerland, Wales and Montenegro in Group G as they bid for a place at the finals in Poland and Ukraine.
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