The former Rossoneri coach believes the Blaugrana are favorites to progress to the Champions League quarterfinals, and has praised Mario Balotelli's start to life at San Siro.
The Russia boss has experience coaching top sides in both La Liga and Serie A, and is of the opinion that the gap in quality between the Rossoneri and the Blaugrana is obvious.
"[Milan] need a bit of luck," he told Sky Sport 24. "There is too much difference at the moment between Barca and Milan, and, in fact, between Barca and most other teams."
Mario Balotelli has scored four goals in three games since returning to Serie A with the Rossoneri and Capello went on to say that he has been shocked by the striker's performances.
"[Balotelli's] form is a surprise to me," he added. "He needed to find an ideal environment and return to Italy to be an important player.
"What's amazing me is his attention, his commitment, and his collaboration with his teammates. I never saw this side of him at City or Inter."
The former Juventus coach believes that the reigning Scudetto holder remains the favorite despite having seen its form falter in 2013, most recently being beaten 1-0 by Roma on Saturday thanks to a Francesco Totti strike.
"The Bianconeri are clearly the favorite," Capello added. "Napoli have been affected by off the field issues.
"Totti is player with great vision. He does not even need to think through steps as he plays. The Roma I know should have been one of the favorites for the Scudetto with Juventus, even if the Bianconeri are the strongest team. They have extraordinary talent but unfortunately had problems during the year. They are potentially the strongest team there is after Juve."