Bolton striker Davies, 33, has been called up for the Euro 2012 qualifier against Montenegro next Tuesday.
While Coates is pleased for Davies, he is disappointed Matthew Etherington has been overlooked.
The Stoke left winger missed out even though he has had a hand in 10 of his club's 12 goals this season.
Coates, an FA councillor, told the Stoke Sentinel: "I am sure England must have looked at Matthew Etherington because other clubs can see what a good player he is.
"People say England should look at players with the big three or four clubs who have Champions League experience.
"But the only obvious thing to conclude from that is it has not served us very well so far. It is time for a rethink. The so-called golden generation wasn't even bronze.
"I don't agree with the view that the best players always make the best team. Sometimes a player, because of the way he plays, can do more for the team than someone else who might be more talented.
"For example, the media rabbit on about Steven Gerrard and Frank Lampard playing together, but that hasn't worked."