Capello insists the former Chelsea midfielder should be pushed in an advanced role this season.
He said, "Loftus-Cheek? I believe he should play in the middle, in the position where he scored 10 goals with (Maurizio) Sarri's Chelsea during the 2018-19 season. He should be put back there.
"Would it be the decisive move? He has leg, foot, running, an excellent sense of insertion. Milan's midfield will depend on this type of tactical solution. Physically he is overflowing, we have seen him several times during the year, and in fact as an attacking midfielder he has smashed several."
On AS Monaco midfielder Youssouf Fofana arriving, Capello also told La Gazzetta dello Sport:"I would say yes. More than being a director Fofana is a dam. A balancer. Someone who can act as a breakwater and fill the gap that emerged last season, Milan would solve a big problem because, I repeat, he is not a playmaker."