The Three Lions take to Poland and Ukraine for Euro 2012 in a matter of months, but the uncertainty over the new national coach has taken precedence over preparations for the tournament.
"An astute appointment by the FA would a caretaker, which would defuse all the pressure on the players and the manager who go to the tournament," Hoddle told ESPN.
"This is such a big tournament that the players and manager are under enormous scrutiny. It cannot possibly be a good idea to subject a new full-time England manager to all of that with so little preparation time.
"All the small details of the preparation have already been sorted out by the FA, and it would make sense to bring in a caretaker and that will bring down 50% of all the hype, and expectation levels from the supporters."
Reports have claimed that the English governing body are due to announce the new manager before the end of the season, with Tottenham Hotspur boss Harry Redknapp remaining the frontrunner for the spot.