The German Football Federation (DFB) implemented a raft of structural changes over a decade ago which have resulted in the production of a plethora of exciting young players for the national team in recent years.
"Germany have been heavily engaged in a radical renewal," Azzurri boss Prandelli told SID.
"They have shown courage and a new approach. This has changed the quality of their game radically."
Italy are currently struggling to unearth new talent, while Serie A sides are often lambasted for failing to invest more in youth development.
Prandelli, though, insists that the situation is improving, claiming: "In the last two years a lot has changed.
"We will soon see a new generation of players in the national team. Italy must rely on youth to have a future."
Italy have been drawn in the same group as Spain, Republic of Ireland and Croatia at Euro 2012.
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