Gallacher admits it is a gloomy era for Scottish football following their 3-0 humbling by Wales in Cardiff, which led to Monday's sacking of George Burley.
Dundee United boss Craig Levein and Rangers manager Walter Smith are the two front-runners to take over, but Gallacher fears money will play a deciding part in the SFA's decision.
"Considering the lack of money at the SFA, I guess we have to look at people who are out of work," he told Sky Sports News.
"The problem with Craig Levein is that Dundee United would ask for a compensation package. Whether Craig would take the job I don't know, but the SFA may not have the money.
"You never know with Walter Smith due to his current situation at Rangers, but he would walk into a warm welcome with the fans because he did a fantastic job the first time."
Gallacher's own personal choice would be former captain Gary McAllister, although he admits there is a particularly tempting dark horse worth looking at.
"John Collins would be worth putting your money on at 16/1, he's a great manager is Little John," said Gallacher.
"He had a great philosophy at Hibs, he likes to play the ball along the ground and I'm sure he would throw his hat in the ring. I might have a side-bet on that one.
"Gary McAllister is a great young up-and-coming manager who is a good coach so why not go for somebody like him?
"International management is about stabilising a squad and getting them to play a certain system. So if you're basing it on that criteria, Gary would be your man.
"As a former Scotland captain he commands that bit of respect from the players, which could help them."
Gallacher believes a lack of finances will stop the SFA taking a chance on another foreign manager, and he has called on the country's next generation of stars to consider if they want to play in a World Cup before taking the easy route to big money on Premier League benches.
The 42-year-old: "We had six or seven players emerging under Walter and we all got excited about what these players would be doing at the age of 27/28.
"But we seem to have gone backwards a little bit. That's the disappointing thing, we were all looking forward to these guys coming through.
"I don't know where the next star comes from. A lot of our youngsters are going south of the border nowadays and don't seem to be furthering their education.
"Maybe these players need to be more patient in their route to the top."