Milner announced his retirement from England duty several weeks after Euro 2016, a tournament in which he played just three minutes.
The Liverpool midfielder has enjoyed a superb season with his club, topping the Champions League assist charts and spurring his side to the final of the competition.
"James Milner has been a revelation this season," Redknapp told Sky Sports News. "It makes you think - would you bring him back to the England squad? I've never seen Milner play better, he's in the form of his life.
"With Oxlade-Chamberlain out, we haven't got lots of central midfield players. But he's in great form, the best form he's ever been in. He's been a top performer in the Champions League, in terms of assists.
"Normally when a player retires, you don't like to go back but I don't think anybody in football, if Gareth Southgate did it, would say it was out of order. I think it would be a great decision, a brave decision on both parts, but one they should make."
Milner has won 61 England caps since his 2009 debut, scoring once.