The 31-year-old had been tipped to be called into the England squad last season following his impressive campaign with the Canaries, but he has yet to receive a call-up.
"In the case of your man, Grant Holt, of course there is no reason why a man like him with the abilities he has could not play for England," said Hodgson.
"But the problem for me is there are a lot of other players who can play for England as well with maybe different characteristics. Sometimes you have to take all these things into account."
Holt has been with Norwich since 2009.