The former Spain Under-21 coach is the latest person to question Jose Mourinho, with many believing youth-team prospects are being overlooked by the Blancos trainer
The 46-year-old, who was in charge of the Spain Under-23 team during their poor showing at the Summer Olympics in London, spent seven years at the Santiago Bernabeu between 1990 and 1997 but learnt his trade at Barcelona.
"From the outside, all you can see is the gap between the youth and first-team players. Making the jump to the first team is very difficult," Milla said during the Second Conference in Support of Aid for Chad.
"There's a certain level, and the coach, who never tires of saying so, has a clear policy of not betting on the youth players."
Following his retirement in September, former Madrid madfielder Guti told Marca of his intentions to coach the side's younger players: "I'd really like to coach the Real Madrid youth team. That's my dream."
And with the ongoing controversy surrounding the role of the youth system under Mourinho, he also gave his take on the situation.
"I'm looking at it from a distance. I don't have a reason to side with one or the other," Guti added.
"I have the utmost respect for Mourinho and the utmost respect for [Castilla boss Alberto] Toril. I hope everything goes well - that Madrid wins titles, the best players play and that there are homegrown players amongst them too."