The 19-year-old midfielder starred for his country as the Young Lions won the U17 World Cup in 2017 and has since stepped up through the ranks into the U21 set-up.
He is considered to be one of the most naturally-gifted performers to have been developed by the English game in some time, but faces fierce competition for places at club level.
That has restricted him to just 102 minutes at City this season, with Pep Guardiola favouring other more experienced options.
It has been suggested that Foden may need a switch, potentially a loan one, in order to get the game time he needs to further unlock his undoubted potential.
Such a decision may allow the youngster to force his way into Southgate’s plans, but the Three Lions boss is not convinced that a change of scenery is required for a player with time on his side.
“Phil is still physically developing and I know Pep recognises the quality of the player, but equally the quality of the opposition around him,” said Southgate, as he readies his side for Euro 2020 qualifiers against the Czech Republic and Bulgaria.
“So I’m sure in the coming months that game time will increase as the number of matches racks up.
“I think you should always assess those things halfway through the season and towards the end of the season to see how much football they’ve got, and then I’m sure they’ll make a decision on what’s right for him as a player.
“It isn’t always as straightforward as to go on loan because that is fraught with some difficulties as well at times with the style of play, different training regime, everything around him.
“But I know those discussions will be going on at Manchester City at the top.”
Southgate is prepared to be patient with Foden and believes others should be taking a similar approach with a playmaker that should benefit in time from being at one of the biggest clubs in world football.
He added: “It’s a little bit harder to get in the side at those bigger clubs, but when you’re in, as the Chelsea boys are now, there’s a great opportunity to play important matches, big-match experience.
“So, I’d probably try to calm Phil’s situation, because there’s a lot of expectation around him and I think that’s a huge pressure for a young player potentially.
“At the moment, a lot of his game has been forged with our junior team. That’s how he’s appeared on the scene, so we’re really happy with his progress.
“His mentality when playing with the Under-21s in the last match was great. He needs those matches. He needs that stamina and that game time, and we think it’s right to put him on.”