That is a boost for Hodgson, who may opt for fresh faces when England play Denmark in March at Wembley, ahead of next summer's World Cup.
"At the moment, I've seen a lot of our England players and contenders for England places playing extremely well. I wish I could bottle up some of the form and keep it," Hodgson told Sky Sports News.
"It's quite fascinating at the moment going to games, the number of players getting games, especially some of the youngsters, is good.
"There are a lot of teams fielding English players in their line-up at the moment and I'm seeing a lot of good performances.
"If I had to pick a team for the World Cup today it would be a major headache."
England captain Steven Gerrard, his Liverpool team-mate Daniel Sturridge and Townsend have been laid low by injury recently.
However, Hodgson is not yet panicking, adding: "My nerves when watching games is not as high as it might be at the end of April where if anyone got injured they wouldn't make it in time."
England face a testing time in Brazil after being drawn to face Italy, Uruguay and Costa Rica in their group matches.
Yet Hodgson is undeterred and is taking some consolation from Euro 2012, where they emerged from a tough group before being eliminated by Italy on penalties.
The former Inter Milan boss said: "We had an equally tough group in the Euros and we got out of that group and got ourselves to the quarter-finals.
"We believe we can do it. There are no easy groups in the World Cup."