The Three Lions will face Italy in Manaus in their group opener, before games against Uruguay and the unknown quantity of Costa Rica in the south of Brazil
Cesare Prandelli's side knocked England out of Euro 2012 on penalties at the quarter-final stage and the Three Lions have never beaten the Azzurri in tournament football.
The same can also be said of Uruguay, who England face in their second match, and Hodgson agreed that it was a particularly tricky draw.
"Well it's a tough group, there's no doubt about that," he told the BBC. "I think a lot of people of course were saying they're in tough groups but there's no doubt that with Uruguay and Italy we've almost got two number one seeds in our group because Italy were very unlucky not to be seeded amongst the first eight."
The Three Lions will face Italy in the Group D opener in Manaus, in the north of Brazil, before flying south for games against Oscar Tabarez's side in Sao Paulo before finishing with Costa Rica in Belo Horizonte.
Hodgson added: "And of course we know how good they are because we lost to them on penalties in the quarter-finals of the Euros.
"But the good thing I suppose is that we know each other, which isn't such a bad thing, and the other thing I suppose which works in our favour is the game we've got in the north, where conditions are going to be tough climatically, is that it's against another European team so we're both going to be in the same boat.
"If we'd have had three games up in the north I think it would have been difficult. There's no doubt the climate in the north for European teams is going to be tougher, so I suppose in some ways we've got to regard that as an advantage.
"It's going to be quite difficult to put a positive spin on the quality of our opponents, because even Costa Rica, who are maybe the least known, have a very strong team and Jurgen Klinsmann was just warning me how good they were because they were in their group in the qualifiers."
When it was put to Hodgson that this was the worst case scenario for England, the 66-year-old agreed that it was a big ask of his side, but remained thankful for two short trips from their Rio de Janeiro base for the final group games.
"I think you're always hoping... to be frank there weren't many scenarios where you'd have been jumping for joy. There were a lot more scenarios where you thinking this is going to be tough for us, so to get one that's a bit tougher for you doesn't surprise me at all because there's a lot of travelling to be done for most of the groups.
"I think our main advantage will be being based in Rio we've only got one long trip and the other two trips to Sao Paulo and Belo Horizonte are relatively short trips and in the same neck of the woods."