"A coach must have a feeling for the heart and soul of his players - look at Nigeria for instance," he said.
"The players may be in Europe but the coach must understand, deeply, the mentality of the players. How can someone from outside do this?"
Blatter also believes African teams suffer from poor preparation.
While no African team made it past the quarter-final stage at the London Olympics, Blatter, speaking at the Games, believes the continent's sides at that level are more competitive than at senior level.