The Three Lions boss went on to hail the Manchester United striker's "magnificent" attitude and praised the efforts of his players but called the Italy game a "bridge too far."
The former Three Lions manager hit back at Rooney's 'lost in translation' jibe on Tuesday by suggesting that he could "only understand Scottish".
Hodgson, however, jumped to the defense of the 26-year-old before continuing to praise the squad for its efforts in Poland and Ukraine.
"Capello is entitled to his opinions, I suppose," Hodgson told talkSPORT. "I don’t know what relationship he would have had with Wayne but I always think it’s a bit cheap to kid on a player who was so anxious to do well. His attitude [at Euro 2012] was magnificent. He was putting in extra work in training because he was concerned he was behind the others having missed the first two games through suspension. He was trying to do extra work and we were trying to put the brakes on. His desire to do well was enormous.
"In the final game [against Italy] he, along with one or two other players, didn’t play to the level he can but that’s what football is about. If every player was a robot and played at the same level in every game then football would be a very simple game and we wouldn’t need coaches."
Aside from a promising opening 20 minutes in which Glen Johnson and Danny Welbeck were unlucky not to score, England was vastly outplayed by Italy on Sunday and eventually succumbed to defeat in the dreaded penalty shootout.
“Maybe it was a bridge too far," Hodgson continued. "We ran out of legs a bit in the final part and didn’t keep the ball as well as we should have done but it was a valiant effort to take the game to penalties. There was a brief period in the first half when we showed what we could do but we couldn’t keep that up. Getting to penalties was the best we could do.
"I don’t think we could have done much more. The players' focus couldn’t have been better, and the effort couldn’t have been better."
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