Capello calls for action over stealing talent
The Italian said the globalisation of football meant clubs were filling their youth teams with players sourced from all over the world, often to the detriment of their long-term development.
"A line needs to be drawn," Capello told a football conference in Dubai.
"Clubs are talent-scouting all over the world and are stealing young players. FIFA should pass new rules. I've spoken to [UEFA President Michel] Platini and in the future clubs will be forbidden to steal players when they are very young."
FIFA does have a statute, Rule 19, banning the international transfer of players under 18, but one aspect of it allows transfers to take place if the player's parents move to the country in which the new club is located for reasons not linked to football.
A rule banning under-16 transfers exists as far as European Union transfers are concerned, but this is often flouted through other exceptions.
Top European clubs have long been accused of using financial muscle to harvest the best young players from abroad with English clubs and the likes of Real Madrid and Barcelona in Spain, often cited as doing so.
Ironically, one of the most famous examples of the practice saw Cesc Fabregas leave Barcelona for Arsenal in 2003, at the age of 16, with the Catalan club complaining that the English club had poached him from their academy.
Fabregas returned to the Nou Camp this year for an initial fee of 29 million euros, a significantly larger sum than Arsenal paid originally to prise him away.
But there have been many other examples and the Italian said the rewards being offered to young players by the richest clubs to sign with them were often too good to turn down.
"These clubs are offering players and their families a lot of financial support. If the family is poor and it will contribute to the family, they will be happy to move abroad," he said.
Capello, 65, has vast experience of how the transfer system affects young players having coached at Real Madrid, AC Milan, AS Roma and Juventus before taking over as England manager in 2008.
He is leaving the position after next year's European Championships.