The 30-year-old stepped down from national team duties after guiding Germany to World Cup glory in Brazil earlier this summer and Beckenbauer finds it hard to comprehend Lahm's decision.
"Lahm's decision to retire came as a complete surprise to me. I would have understood it for a number of players, but not for Philipp Lahm," Beckenbauer told Sky Sports HD.
"The team desperately needs him. He is the leader of this squad. It will be very tough to replace him.
"He still has plenty to offer at the age of 30. He is more than capable of using his energy wisely, regardless of his position on the pitch.
"Yes, he won the World Cup, but that's not a reason to say farewell to the national team."
Lahm made 113 international appearances for Germany, scoring five goals in the process, and featured at three World Cups and as many European Championships.
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