"So, one has to be very careful these days when talking about the Premier League and talking about the Englishness of it, because more than two thirds of the players in the league are not English.
"We have one of the lowest number of home-grown players to choose from in all the leagues, which, if you are national team manager, is not a great advantage, to be frank."
In the Bundesliga, the figures for German talent getting a regular game are the polar opposite to the English Premier League, with participation at well over 60% and it's the same percentage in Spain, the reigning World Cup and European champions.
Barcelona's famed La Masia academy nurtured the genius of Argentina's Lionel Messi and midfield maestros Xavi and Andres Iniesta, who have been the corner stone of Spain's international success.
On the evidence of the 7-0 semifinal mauling by a rampant Bayern, Barca may need to replenish their ranks with younger talent, with Thiago Alcantara and Cristian Tello pushing to graduate to regular first team play.
In England, there are signs that the principles Hargreaves and so many others espouse may finally be incorporated into the national game.
The Premier League has introduced rules that mean eight of the 25-man squads must be "home grown" talent, limiting the number of foreign players over 21 to a maximum of 17.
The Premier League also has high hopes for its Elite Player Performance Plan, which is designed to increase the number of home grown players playing football at the highest level.
While this does not mean the English youngsters will get a starting place, it does broaden opportunity and the English Football Association (FA) has also built a new National Center of Excellence in St George's Park in the Midlands.
For Hargreaves it cannot come a moment too soon and his former Manchester United teammate Gary Neville, now an assistant coach to Hodgson, has also seen the danger signs.
"There's a tipping point and I think we've gone beyond it in England. We're maybe 20 per cent off. We need to give more chances to our own. We're harming ourselves a little bit." he was quoted recently.
Ironically, the rising star of the Premier League is a Welshman, Gareth Bale, who won the young player and player of the year awards for his incredible performances this season for Tottenham Hotspur.
Bale was developed by Southampton's academy, which also produced Arsenal and England striker Theo Walcott and Alex Oxlade-Chamberlain -- proof that young talent can thrive in Premier League if given a chance.
Hodgson and Neville must be ruing the fact they cannot pair former teammates Bale, Walcott and Oxlade-Chamberlain in the England line-up, while Tottenham will be anxious their star asset remains at White Hart Lane.
After Barcelona and Real Madrid's maulings at the hands of the all-conquering German sides they are rumored to be looking to supplement their own home grown Spanish stars with big money signings and Bale is reportedly a prime target.
Bayern, with former Barca coach Pep Guardiola taking over from Jupp Heynckes next season, are also not adverse to using their financial muscle as well.
Dortmund's talisman Goetze is switching to the Allianz Arena next season -- making it even harder for sides from the EPL and other major European leagues to challenge a likely new era of German domination.