Loftus-Cheek, who is on loan from Premier League champions Chelsea, impressed in the Three Lions' 0-0 draw with Germany.
The 21-year-old's England debut in that game has added to Gareth Southgate's options, and Palace boss Hodgson believes that Loftus-Cheek could be a worthy contender for a World Cup place.
"Why not?" Hodgson said when questioned by reporters. "The important thing for us is that he plays well for us. I am convinced that if that happens, he will be a contender for Gareth Southgate."
Loftus-Cheek is a doubt for Palace's game against Everton on Saturday, however, after sustaining a back injury in Tuesday's goalless draw with Brazil.