Hodgson reportedly has a limited transfer kitty available as he attempts to take the Reds back into the Champions League next term.
While seeking quality, the experienced tactician is also thinking practically about future recruits.
He said: "We would be foolish not to be aware of the importance of homegrown players with the way Uefa and Premier League rules are going.
"Otherwise we're going to struggle to get our squad numbers together.
"I think the club have been trying to do that already with younger players like Jonjo Shelvey and Raheem Sterling but it takes time for them to come through so we might have to go into the transfer market."