The 66-year-old, who is currently without employment, insists he does not want to guide the Azzurri and claimed that he always backed the current side to do well at Euro 2012
The 66-year-old has been repeatedly linked with a return to his homeland since stepping down as Three Lions coach in February after clashing with the Football Association.
"I have said it before and I would like to repeat: taking charge of the Italy team is something that does not interest me," Capello told Radio 2. "Another thing: I am at a certain age now."
Commenting on the performance of Cesare Prandelli's side at this summer's Euros, the former Juventus coach stated that he always had faith in their ability to qualify for the last eight.
"I always thought that Italy were stronger than Croatia and Republic of Ireland, because I watched their match against Spain in Poland," he continued.
"This is a good national team, who can play their part at the Euros."
After finishing second in Group C, the Azzurri will now take on either France, Ukraine or England in their quarter-final match.
"France have more creativity, but England have gained confidence and are doing what they should be doing," Capello added.
"They are the players that I would have chosen. I have spoken with Roy Hodgson and I am happy."