The Italian has a huge decision to make ahead of Friday's meeting with Algeria following the blunder by Robert Green that handed the USA a 1-1 draw.
Capello must weigh up whether the West Ham goalkeeper deserves another chance or if England's hopes of reaching the knockout stage would be better served by making a change.
Martyn, who won 23 international caps when playing for Leeds United and Crystal Palace, believes Green should get the nod ahead of both David James and Joe Hart.
Equally important, he believes, is the need to ensure there is no repeat of last Saturday when Capello's players were made to wait until two hours before kick-off to be told the starting XI.
Speaking to the Yorkshire Post, Martyn said: "If Robert Green is playing against Algeria then he should be told by Thursday night at the latest.
"Ideally, it would be earlier with the England managers I played under usually telling the players the team on the morning of the day before a game.
"That way, anyone in the team was able to get everything straight in his head. Everyone is different, but most want to tell their missus or family. You want those closest to you to be able to share in the good news.
"Finding out early also means you can work on a few things as a team.
"In my case, I always wanted to know who would be in my defensive wall or who was marking who at set-pieces.
"Everyone needs to know their job and that can't happen if
no one knows who will be playing until late on."
Capello's decision to delay naming his team for the USA game has drawn heavy criticism from pundits and fans alike.
Whether he does the same against the Algerians remains to be seen, though Martyn believes the injury to Ledley King makes it even more imperative that the starting XI is finalised early.
The current Bradford City goalkeeping coach said: "An extra factor ahead of Friday is that there is a doubt over who will come into the centre of defence.
"If it is Jamie Carragher, he and John Terry will want to get some work done together. With that in mind, it would help not only both players to know but also the whole team.
"In certain respects, I can understand a manager not wanting to give too much away because the press always try to find out the team beforehand. But there are ways of keeping it secret.
"The cameras and reporters are only allowed into the first 15 minutes of training so when I played we wouldn't work on anything until they had gone.
"I just don't think being told two hours before helps the players. It is important to get yourself sorted in your own mind. I don't think that is just the case with goalkeepers, either. Most players would want to know.
"If the players are only told two hours before kick-off then, suddenly, you can be in the spotlight. There will be team-mates coming up to congratulate you and saying 'well done'.
"Personally, I feel a player does not need to have distractions like that so soon before a game. Nerves would also be thrust on you by finding out at such short notice.
"Finding out a day or so before means you get that initial excitement out of the way, allowing you to focus. It gives you time to yourself if that is what you need.
"It also allows a player to sleep on the news and digest it properly before going out to play."
As for who should be in the England goal on Friday night, Martyn believes Green should be given another chance to put right his error against the USA.
The former international who went to two World Cups with the Three Lions said: "It is time for everyone to look forward. The manager will have been watching training and how everyone has been, especially Robert Green.
"The manager will know what Green's reaction has been from his body language around the camp and in training and how he is around the rest of the squad.
"I don't think you should drop someone for just one mistake. If he makes another on Friday against Algeria then, by all means, a decision will have to be taken.
"But, hopefully, it will prove to be a one-off blip. That is why I would keep Robert Green in the team.
"My concern before the tournament was how David James has, in some games, had a big mistake in him. That may look ironic considering what happened against the USA.
"But I still think Robert Green is less likely to make that mistake again and that is why I would stick with him for the Algeria game."