The former England manager has been appointed to the Football Association Commission, which will aim to improve all aspects of the English game.
"The rules have got to change in the short term," Hoddle told Sky Sports News. "We have to help the England manager to have a better base over the next two or three years to get the experience that these players need in our top league.
"Sixty-eight per cent [of players] of the Premier League [are not eligible to play for England] at this moment in time and getting worse over the coming years - if we don't do anything about it - is too much.
"We have to be ruthless in this. We have to be thinking about English, English and English again."