Matthaus – who won the 1990 World Cup – feels England should be contenders in four years' time, however.
The former Bayern Munich star pointed to the country's success at the Under-17 World Cup last year, but he believes Germany could go back-to-back by lifting the trophy in Russia.
"England have a very good team, young team," he said.
"Maybe the World Cup is coming four years too early but for the next World Cup I think they have very good players and have made good results with the youth team in the last 18 months.
"I think the Premier League is the toughest league in Europe. Big teams, great coaches, like Jurgen Klopp, like [Jose] Mourinho, like [Pep] Guardiola.
"We have to work very hard with academies and for this we have a good national team and I think Germany, how they played against Spain [in a 1-1 friendly draw] would be once again one of the favourites for the title."