Spurs, in what was the biggest game in their history, opted to include the prolific striker from the start for a meeting with Liverpool.
Kane had been nursing an ankle problem since early April, but was deemed ready for action in a European showpiece at Wanda Metropolitano.
Clearly short on match sharpness, the 25-year-old made little impact in a 2-0 defeat which dashed Tottenham’s continental dreams.
Pochettino has defended his decision to select Kane, who is now preparing for international duty and a Nations League semi-final clash with the Netherlands on Thursday.
Former England frontman Shearer is hoping to see the Three Lions favour a different approach to Spurs, telling The Sun: “I’m sure Pochettino agonised over whether to start Harry Kane but he got that one wrong.
“Kane didn’t look fit at all and didn’t turn up in Madrid — he was nowhere near as sharp as he could and should have been.
“I imagine Harry was in Pochettino’s ear all week and he has had a week to judge it based on seeing him in training. I’ve been in the same situation myself.
“He may never feature in a European Cup final again so he would have been desperate to play. But you have to judge him on his performance and he simply wasn’t 100 per cent fit.
“Harry Winks was exactly the same — he hadn’t played for over two months yet he was risked to start in such a huge game for the club.
“To play one was a gamble, to play two who haven’t played for that long was a huge risk and it didn’t pay off.
“I’m sure Pochettino will be thinking “If only”. If only he had done something different. Lucas Moura could have offered them an alternative way of playing.”
Shearer added on the selection poser now facing the Three Lions: “It will be a slight concern for Gareth Southgate, who now has some big calls to make in preparation for England’s game against Holland on Thursday.
“He will have to see how Kane has reacted, but those 90 minutes can only be good for him and his overall match fitness. He got the game time he needed.
“However, Southgate has other options so there is no need to risk him.
“He could quite easily be used as an impact sub.”