Lambert has received praise for his performances in the Premier League so far this season, but was overlooked in favour of West Ham United's on-loan striker Andy Carroll.
However, Le Tissier believes that Lambert was more deserving of a spot in the squad than Carroll due to the latter's injury problems.
"I find it a bit frustrating that England don't always pick the players on form, and that instead they pick players on reputation," he told talkSPORT.
"I've got nothing against Carroll but he's been injured and has barely played, yet he comes straight back in, while Lambert has been banging the goals in and giving the likes of Rio Ferdinand a really tough time.
"I think that warranted more of an inclusion than Carroll."
Lambert has scored four goals in seven games for the Saints so far this season.