Carlo Ancelotti believes England's future is bright despite their early exit at Euro 2016, and says Eric Dier was one of the best players at the tournament.
Roy Hodgson's England were embarrassed by Iceland at the round-of-16 stage, losing 2-1 to the tournament debutants Iceland to spark another nationwide inquest into the failings of the national team.
Incoming Bayern Munich head coach Ancelotti -- who spent two seasons managing in England at Chelsea -- sees plenty of potential in England and singled out Tottenham's defender-turned-midfielder Dier as one of the stars of the tournament.
"As an Italian you will wonder if I can empathise with what those of you who support the Three Lions are going through," Ancelotti told the Daily Telegraph.
"But really, it is not as bad as you think. Let me tell you one thing: this England team has a lot of potential. I like these young players that Roy Hodgson picked. I think Eric Dier has been one of the best players in the tournament.
"[Dele] Alli will be playing Champions League football next season and he will be one of the best young players in the competition," he added.
Tottenham duo Alli and Dier are part of a new generation of England players, who are versatile and sound technically -- but their mental strength is in doubt after the humiliation in France.
Ancelotti is unsurprised by England's quality, and stressed that every country must endure barren spells on the road to success.
"England have a future. They were the second-youngest team in this tournament," he added.
"It does not surprise me that they have some good young players, because I could see when I was at Chelsea that the level of boys' football is technically very good.
"Every nation goes through periods when they do not produce enough quality players. The most important things is that you keep trying and eventually the flow restarts."