The 67-year-old replaced Louis van Gaal in the summer and has lost three of his opening four games - including two Euro 2016 qualifiers.
Two first-half goals from Gylfi Sigurdsson were enough to give Iceland the win last night, and De Boer claims that Hiddink is coming to the end of his managerial career.
"I think Guus Hiddink doesn't really have a game plan in my eyes," the former Netherlands defender told Sky Sports News.
"There's plenty of games to play and change it around. But the pressure will be enormous now for Guus because there was criticism for his nomination beforehand.
"Koeman was ready to take over, he was really outspoken, he really wanted to take the job. With all due respect for Hiddink, he's 67 years old, I think he's done, in my eyes. His ideas now are old-fashioned."
The Oranje sit third in Group A on three points, six behind co-leaders Iceland and Czech Republic.