The 27-year-old underwent knee surgery two weeks ago after sustaining an injury at the end of the Premier League season, and as a result did not play in Uruguay's 3-1 defeat to Costa Rica in their Group D opener.
However, the Liverpool forward is expected to play against the Three Lions in their clash in Sao Paulo on Thursday.
Hodgson told reporters: "I think he will only be at that level when he shows it on this particular stage. He has got the potential. He is he a wonderful footballer.
"But if you are really going to put him up there with [Diego] Maradona, Pele, [Franz] Beckenbauer and [Johan] Cruyff, and [Andrea] Pirlo, this is the stage you have got to do it on really.
"You can be a great player in your league but for the world to recognise you are one of the all-time greats you have got to do it at the World Cup."
Suarez fired Liverpool to Champions League football next season as he scored 31 goals in 33 games for the Reds in the last campaign.