Montenegro currently top Group H, leading the Three Lions by two points, and will host Hodgson's men in Podgorica on Tuesday night.
A win would put England in control of Group H, and could play a decisive role in determining who qualifies automatically for Brazil 2014.
|7/2||Jermain Defoe is 7/2 with BetVictor to be England's first goalscorer against Montenegro on Tuesday
“I would certainly put them up there as one of the serious rivals, especially on the basis of what we saw in the Euros and what they did when they came to Wembley.”
“I always thought it was going to be a bit of a dog fight between some of these teams. Montenegro have stolen a march but I don't really dismiss the others.”
Despite England’s 8-0 thrashing of San Marino on Friday night, Montenegro preserved their lead at the top thanks to a narrow 1-0 win in Moldova, rendering the outcome of Tuesday’s meeting between the top two even more significant.
Hodgson added: “Whatever the result in Moldova it would have still been a big game for us on Tuesday.
“Montenegro are one of our serious rivals for the top spot and we must do our best to get a win there.”