The former Milan and Italy defender feels the Italian Football Federation (FICG) has a number of options to replace the ex-Juventus boss, who will leave his post after the tournament in France with Chelsea expected to be his next destination.
And Tassotti thinks 69-year-old Capello – who coached England and Russia at international level, while being known for his club spells at Real Madrid, Juventus, Milan and Roma – would be a sound selection.
"I do not know what the choice can be, however if you want to play safe, there is Fabio Capello," he told Omnisport.
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"Capello is available, without a team and nobody would have more credentials than him to manage the national team.
"The decision is up to the Italian Federation. I believe there are a lot of managers that could take over. There are rumours about Capello, or [Torino boss] Giampiero Ventura, I do not know.
"I believe though we have several coaches that can lead the national team. It depends if the Federation wants a younger coach, or someone coming from the Federation itself, like Luigi Di Biagio, who is in charge of the Under-21s."
Italy, who play Spain in a friendly on Thursday, were runners-up at Euro 2012 but crashed out of the 2014 World Cup at the group stage.