The winger has made a sensational start to his Red Devils career scoring twice and providing four assists, and his winner against Wales on Tuesday night was his third goal in his last six England games.
Capello left Young out of his World Cup squad in 2010, complaining that the player was starstruck on international duty when he was at Aston Villa.
The England manager said: "The pressure Young has to face in every game is big - so it is normal when he plays for England. It has given him a lot of confidence.
"This is what happens when you play with top teams - with Real Madrid, with Barcelona, with Man United or Bayern Munich.
"What's changed with Ashley is that now he is playing with a really important team. And he has improved a lot.
"The confidence you get when you play in a really important team improves you a great deal.
"He can play as a second striker behind Rooney or on the left. He is technically good, fast and has a good imagination. He scores goals - he can shoot with his left and right."
Capello is also planning on blooding youth not burdened with the disastrous World Cup campaign before Euro 2012.
Young's United team-mates Phil Jones, 19, and Tom Cleverley, 22, could make their international debuts against Spain and Holland, as the Italian looks to dispel any complacency amongst the older members of the squad.
Capello added: "I've done it before in my career; it's my job (to blood youth). I know Jones and Cleverley will feature in the next friendlies.
"I remember with Wilshere, when he started the season, he wasn't OK. The next game - great.
"It will be an important chance for these players."