Writing on his official website the former Valencia, Liverpool and Inter boss suggested that the FA should "Change the structure of competition by creating a U21 League."
He continued: “In the absence of the subsidiary teams of the club being able to compete in other divisions as happens in Spain, the only way to provide matches for these young players is through the Reserve League.
“From my point of view, this should be an U21 national competition with permission to select a limited number of first team players for them to keep pace with competition or recover from injury."
Benitez believes the current English system restricts the progress of talented youngsters as there is no dedicated youth competition beyond U19 level.
“In Spain the players compete every week and do so at the appropriate level,” he said.
“In England, at age 19, if they are not quite at the required level, they are not good enough to play in the Premier League so have to go to other lower clubs where the level and style of football may not help them improve their basic skills.”
The former Liverpool boss, who spent nearly 10 years working at grass-roots level in Spain for Real Madrid, proposed the idea of introducing regional team tournaments comprising of no more than 4 players per club.
"Create regional teams with a limited number of players per club to avoid prejudicing the daily work of the clubs, and with competitions between them a few times a year to start producing local players.
“These teams could be county based or regional based (as in Spain) following the regional set up of the FA and local county FA's."
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