The midfielder was at fault for Luis Suarez's second goal during the group match, and Collymore believes that it is time for him to retire from international football.
"Steven Gerrard has been a wonderful servant to Liverpool football club and for England," he told talkSPORT.
"We remember the Germany performance, the 5-1, and he has drove our midfield ever since he came into the side at the 2000 European Championship.
"But, for me now, I think he needs to look at himself and say perhaps he wants to extend his club career and retire from the England national scene."
The defeat leaves England on the brink of elimination from the tournament, needing Italy to win their two remaining games to stand a chance of making it to the last 16.