Capello has indicated he will leave his role at the end of the nation's Euro 2012 campaign.
That, according to Coyle, should open the door for Tottenham manager Redknapp, who takes his side to the Reebok Stadium on Saturday.
Spurs go into the match on the back of a 3-1 victory against holders Inter Milan in the Champions League.
And Coyle insists that result has only increased his managerial counterpart's standing in the game.
He said: "If and when Mr Capello decides after his contract expires he doesn't want to do the job any more, Harry Redknapp would be the perfect candidate to be the next England manager.
"I think the whole country would be pleased about that. He is an outstanding manager and a terrific man, who has been very helpful to me. He has always given his time very generously.
"Harry is picking up Champions League experience as well and has had success wherever he has been.
"Harry Redknapp and England sounds right to me. For me he is an elite manager. The great thing about him is he has worked his socks off to earn that right. He has been working at the coal face. Not only that his eye for a player is terrific."