Capello is under contract until after the 2012 European Championships and former England Under-21 boss Taylor, who also took charge of the senior team for one game against Italy, believes a former England star could do the job.
"Ten years ago I would have said you need a manager with experience," Taylor told talkSPORT. "But now I've had a look at the situation and I think anybody that's played for England on lots of occasions could easily manage England.
"You look at David Beckham, Gary Neville, Alan Shearer. They would have a lot of respect from people because of what they have done in their careers. And they could easily go in and take the right staff with them to make sure they get all the bits and pieces done.
"They would have every back-up needed, that's the beauty of the FA. Working for the FA was brilliant because there's nothing they don't do for you to give you every chance to be successful.
"[Beckham] could easily organise a team, pick a team, and get staff to make sure they prepare correctly. The only big question on all of the ones I've mentioned are if it's going wrong. How are they going to handle those situations. But I would says they would know how it works."
Even if the FA do not opt for a recent international, Taylor believes the next incumbent should still be English.
"There's a silly little thing I've got about the national anthem. The national anthem before every England game is a really special moment, I believe, and that is why the manager should be English," Taylor said.
"It's nothing against Fabio Capello, he's a better manager than I'll ever be, but to me he would be more comfortable managing Italy rather than England."