The Russia boss believes the Dutchman should not be approached to replace Massimiliano Allegri and claims Serie A has suffered from a lack of talent arriving from overseas.
The former Rossoneri midfielder has been touted as a possible replacement for Massimiliano Allegri, whose future remains firmly in doubt following the team's dismal first half to the 2013-14 campaign.
Although he feels Seedorf - now playing for Botafogo - is benefiting from his stint in Brazil, Capello believes the Dutchman would be better off avoiding the San Siro hot seat for the time being.
"I advised him to go to Brazil over the Arab countries or Russia a year ago. Clearly, he is gaining from the experience, but to immediately take responsibility of Milan is something else," the Russia coach told La Gazzetta dello Sport.
Capello believes Milan's current struggles are endemic to Serie A, with a lack of major foreign talent arriving within the league meaning young Italian players no longer have the same role models of past generations.
"Juventus and Roma are at the top because they have invested more in recent years. This hasn't happened with the Rossoneri. I think Allegri has done his duty to the full and doesn't deserve much criticism," he said. "The real problem is the depletion of our league. In my day we had the best talent coming in from all over the world and our young players could grow alongside them, stealing their secrets. Now there is a lack of reference points."
Capello believes the Scudetto has become a three-horse race this season and believes Juventus could falter if the club focuses too heavily on reaching the Europa League final, which will be held at Juventus Stadium.
"I don't see any particular problems for the Bianconeri, although Roma are having an outstanding season and Napoli are deservedly in the hunt. The only question is their double efforts in the Europa League, with the final in Turin. Juve can look to this title and become distracted."