England crashed out of the World Cup in Brazil after finishing bottom of their group with just a single point from three games.
Pearce was capped 78 times for England and believes that the Three Lions need to look to countries such as France and Germany if they want to improve at major tournaments in the future.
"We have to build from the bottom and we failed to build from the bottom," he is quoted as saying by the Daily Star.
"If we don't, and we continue not to send our best young players to the tournaments, we'll continue not to get the results at senior level."
Pearce's first competitive game in charge of Forest will be at City Ground against Blackpool on Saturday, August 9.