The Derby County chief – whose side take on the Terriers tomorrow – spent a little under 18 months in charge of the national side, but was sacked for failing to guide them through to Euro 2008.
Yorkshire-born McClaren subsequently rebuilt his reputation abroad in Holland and Germany before returning to the domestic game.
“Steve was my coach many moons ago under Jim Smith at Derby,” said Powell, who had a two-and-a-half year spell with the Rams in the Nineties. “He was excellent. Jim was looking for a coach and was told about Steve, who had also played for Derby.
“It was a good fit and he went on from Derby to be Manchester United’s coach. He was on that upward scale.
“He was on the right path, with Manchester United as a coach and then managing Middlesbrough to their first final. They won that.
“Then he got them into the European final. Steve was doing all the right things and it will have hurt him what happened (with England). It hurt me, and hurt a lot of the lads who were on the coaching pathway.
“We looked at someone who was doing what we would all like to do and then being discarded and needing to rebuild his career. People looked at him as someone they didn’t want at their club. It was tough for Steve and I admire him for going to Holland, seeing how it is done in a different way.
“It is difficult to say if England was too soon. I can see on one hand why he did it because he will have felt the opportunity might not come again and he didn’t want to let the country down.
“Plus, the FA were asking him and he knew the players. It would be a seamless transition.
“On the other hand, though, after he took the job and lost it, I am sure he was thinking maybe it was too early and that it was the wrong time.”
Asked if McClaren could one day return to the England job, Powell replied: “Possibly. But I’d expect you’d have to ask him if he would do it again. They might do, though. I am happy to say Roy (Hodgson) is the right manager because he has so much experience.
“Steve would be ready and respected if the call did come again.”