Neville's critically-acclaimed tactical analysis, and his role as a coach on Hodgson's backroom staff, meant he was mentioned as an outside bet to replace the England manager when his place came under scrutiny last week.
Hodgson's position was quickly secured, though, meaning Neville and the rest of the backroom staff will continue with the 66-year-old until Euro 2016.
But when asked whether Neville could be an England manager in the future, Hodgson said: "Of course he can be.
"But it would be wrong to start putting him under pressure to suggest, 'You need to get down to some work in a club side because the England manager's job is there waiting for you'. Who knows? When the job comes up again, who knows what candidates there will be."
Some have questioned whether Neville should be allowed to publicly criticise England players in the media when he then has to work with them on international duty.
But Hodgson is more than happy for Neville to continue with his punditry duty.
In fact, Hodgson thinks Neville should not be in any rush to ditch his TV role and move into full-time management.
Hodgson said: "Having a long career in football gets harder and harder.
"The number of jobs available vis-a-vis the amount of time people spend in those jobs gets less and less, so I certainly wouldn't advise him necessarily to jump at the first opportunity to do coaching or management.
"The longer he can combine the two roles (coaching and punditry) the better.
"But I don't have any doubt in my mind that he will become a top-class football coach and top-class manager."
- Sports & Recreation
- Employment & Career
- England manager