The sides will meet at Wembley on Tuesday for the first time since their FIFA World Cup second-round clash in South Africa that saw Joachim Low's charges romp to a 4-1 win.
Hodgson acknowledges that Germany are one of the best teams in the world - and one of the favourites for Brazil 2014 - but believes England have the ability to match them.
"We know that there has been a transition period and we are working towards improving our game, and Germany are one of the teams you look at," he told The Daily Telegraph.
"A lot of things they do are very praiseworthy
"We have players who are capable of doing it and hopefully we will be working on our game to reach that standard. It took them a few years and we are working on it."
The 66-year-old – who revealed on Sunday that he nearly took over as Germany manager in 1998 – has been impressed with the way the three-time world champions have regenerated their national team and hopes to replicate their blueprint with England.
"All the praise that has been heaped on them is very deserved," he added.
"They are really a very good team. Since 2006 and the World Cup they have spent those eight years very fruitfully to put this team together.
"Despite the fact that they are not particularly old, they have a lot of players who are used to playing with each other and have experienced a lot of success in the major tournaments."
