Much has been made of the fact England have failed to win silverware since lifting the World Cup in 1966, reaching the semi-final of the Euros on two occasions - in 1968 and 1996.
However, Xavi, who won back-to-back European Championships with Spain in 2008 and 2012, can see similarities between that side and England's young team.
"I think England have a real chance," the 36-year-old told The Mirror.
"Before we [Spain] won our first title I believe it was the pressure that meant we never progressed past the quarter-finals. Because of our quality there was so much pressure on us - and it got to us.
"England - when they had their golden generation of [Frank] Lampard, [Paul] Scholes, [David] Beckham, [Steven] Gerrard - had that same pressure and it is difficult to cope with. Mentally it can be a big block.
"Now England have this new generation of [Harry] Kane, [Raheem] Sterling, Dele Alli and the English guys that have doing incredible things for Leicester [City].
"They have some very good players, but I don't think there will be the same expectation on them to win the tournament.
"That could work for them, because it allows them just to go and play football. If they can get their leader and great player Wayne Rooney back then they have a big chance."
As for Vicente del Bosque's side, the former Spain international said of their chances: "There is no reason why Spain can't make it three European Championships in a row.
"We have a team that can beat anybody. [Cesc] Fabregas, [Gerard] Pique, [Andres] Iniesta, [Sergio] Ramos all know what it takes to win the tournament, but also we have a new generation of players who can bring new life."
Xavi added: "Of course it will be difficult, but there is a lot of reasons to be confident. Germany will be another of the big favourites. They are the current world champions and have some exceptional players.
"In these tournaments you can underestimate the importance of playing at home, so because of that and also the quality of some of their players you also have to consider France as well."