While Capello is impressed by the Argentina international, the former Real Madrid and Juventus head coach said Martinez would face a challenge to break into Barcelona's starting side.
"Lautaro Martinez is a very good player," he told El Larguero.
"He has everything – a lot of quality, very fast moves and also he's very good when he shoots on goal.
"Going to Barcelona and becoming a starter with Luis Suarez there is difficult.
"I think it is better to be a starter at Inter than a substitute at Barcelona."
Martinez has scored 25 goals in 66 games for Inter since arriving at the club from Racing Club in 2018.