Capello oversaw a woeful World Cup campaign which saw the Three Lions beaten in the first knockout round in South Africa.
But the FA have since announced the former AC Milan and Real Madrid boss will stay on, a move endorsed by former Inter Milan now Manchester City boss and fellow Italian Mancini.
He said: "In my opinion England have the best national coach possible. He is creating the basis for a solid team. The problem is not that, but another one.
"In England you play too much. Capello already said that and so did (former England manager Sven-Goran) Eriksson.
"You cannot have them under pressure as is the case here.
"In the years of European Championships and World Cups, you need a winter break to catch your breath."
Mancini believes England were also scuppered by the decision not to award a Frank Lampard goal against the Germans even though the ball clearly crossed the line.
He added: "I understand the disappointment but we cannot say England left a poor image.
"That in 2010, you don't see that goal given, is not possible.
"Had that game been 2-2, it would have been a different story. England were starting to dominate."