Sven-Goran Eriksson was also sounded out about the position, and Bayern Munich coach Louis van Gaal claimed last season that he had held talks with Peter Kenyon, United's former chief executive, about succeeding Ferguson, who publicly abandoned plans to retire in Feb 2002.
Hitzfeld, 61, is now charged with halting England's Euro 2012 progress in Basle on Tuesday night, but the former Borussia Dortmund and Bayern Munich coach admits the language barrier would have proven too large an obstacle had he taken charge at Old Trafford.
He said: 'I don't want to go into too many details because it was between myself and Manchester United, but I decided to stay in Germany because, when I am coaching I prefer to express myself in German because this is my mother tongue.
'I didn't think I would be able to do myself justice if I had to speak to the players in English. I would not be able to get my emotions and feelings across.
'The players in the Swiss dressing room speak a variety of languages, including Italian, French and English, but when they come to work I coach them in German.
'All the players understand it. If there are some special expressions required then one of my coaches might use a bit of Italian or French, but I coach them only in German and it is better that way.'
Communication problems between Fabio Capello and his England players have been cited as a factor in the poor showing at the World Cup, but Hitzfeld claims communication is only a problem when teams are not winning.
He said: 'As long as you are successful and winning matches the language is no problem at all. But when the results are insufficient, the difficulties begin. At this time a coach needs to go into more detail with his instructions and that's where the problems can lie.'
England, buoyed by Friday's 4-0 victory against Bulgaria at Wembley, must overcome the loss of injured defender Michael Dawson, who joins John Terry, Frank Lampard and Rio Ferdinand on the sidelines after suffering damage to knee and ankle ligaments.
But while Hitzfeld insists England are capable of overcoming the loss of key players, he believes that Capello has still to find a replacement for Owen Hargreaves, whose two-year battle against knee problems has seen him omitted from United's Champions League squad.
Hitzfeld, who included Hargreaves in his 2001 Champions League winning team at Bayern, said: 'I like Owen. I remember him as a very good player and someone good at holding his position and the ball in midfield.
'It is a shame for him and England that he has not been available because he would play well with the likes of Lampard, Gareth Barry and Steven Gerrard in midfield although Gerrard needs to work a bit more on defence.
'But England's injuries don't change anything for us. It would be a huge problem for a small country like Switzerland if we lost three key players like those, but England have a lot of good players still available to select.
'So they will not be weaker in defence. They still remain a very competent team.
'England have always been at their strongest when they are a team, so it's the team we need to concentrate on, not individuals.'