Neymar, who plays for Santos where Pele spent nearly all of his career, has been billed as the best player to have emerged from Brazil in the last few years and is expected to lead the attack at the 2014 World Cup.
But critics say he lacks experience against world class defences and needs to stay on his feet more rather than continually looking for free-kicks.
"There's an awful lot of confidence in him but he's just an ordinary player when he plays for Brazil," Pele told the Estado de Sao Paulo newspaper in an interview.
"Everything is based around Neymar, but he's a player who doesn't have international experience."
"He's an excellent player but doesn't have experience of playing abroad. Everyone thinks he has to solve all the [Brazil] team's problems but he's not prepared to carry that burden," added the three-times World Cup winner.
With 11 sponsorship contracts to look after, there have also been concerns Neymar is being distracted by his off-field activities.
"He doesn't play abroad and European football is different. At Santos, they say he's the best player in the world but he worries more about appearing in the media than playing for the team," said Pele.
"He's hooked on getting free-kicks... The game is tougher in England, Italy, Germany. The referees let play go on."
Neymar had another disappointing performance for Brazil against England earlier this month and his club form has also dipped recently.
The 21-year-old received the fifth red card of his career in the loss to Ponte Preta last weekend.
Pele said Neymar was trying to do too much when he played for his club.
"All the free-kicks, penalties and corners are taken by Neymar. Every time he takes a free-kick, that means he is out of the game for one minute.
"He spends too much of the time out of the game... he should be just outside the penalty area to collect the ball, dribble, use his skill.
"[Santos coach] Muricy Ramalho has a lot of responsibility. It's difficult to take on Neymar.
"Neymar has to pass the ball more, and play for the team," he added.
