Gareth Southgate's senior England side was criticised last week for its lack of world-class talent after labouring to World Cup qualifying wins against Malta and Slovakia.
But former Borussia Dortmund reserve-team boss Wagner insists top-quality youngsters are in abundance in England compared to his home country.
When asked if there was a problem with player development in the UK, Wagner said: "No
From my point of view, and I worked a long time in Germany, full time in academies and with top young players, and what I've seen so far is that here there is unbelievable talent and potential in players (aged) 19, 20, 21.
"We have Kasey Palmer and had (Chelsea team-mate) Izzy Brown, (Leicester defender) Ben Chilwell was here - unbelievable quality, which I rarely found in Germany in this age to be honest.
"Unfortunately these are not our academy players, but academy players from other clubs
But I don't think that England has a problem."
Ironically, Huddersfield owner and chairman Dean Hoyle is currently considering whether to follow Brentford's lead and ditch his own club's academy.
Midfielder Philip Billing is the only player to progress from the Terriers' youth system into Wagner's first-team squad and he joined aged 16 from Danish club Esbjerg in 2013.
Hoyle wonders whether the Â£2million it costs to run the academy can be justified and has yet to replace former academy manager Stuart Weaver, who departed in August.
"To be fair I'm not involved in this process," said Wagner, who admitted Huddersfield did have a problem.
"I think this is totally the chairman and the club's decision
I read about this as well, but this is not where I'm involved.
"Of course it's a problem for a club of our size, who is now in the Premier League, to (be able to) produce Premier League players.
"It's a problem for a lot of clubs' academies to produce Premier League players and it's a problem for us for sure.
"But to solve this problem, this is something the club and the chairman has to decide."
Brentford closed their academy in 2016 and now operate with a cost-effective B team for players aged between 17 and 21, who have been released by Premier League academies or recruited from overseas.
Seven players have already emerged from this system into Dean Smith's first-team squad, with four making their debuts.
"This is what we have done in the past," added Wagner, whose side bid to extend their unbeaten Premier League start at West Ham on Monday night.
"We went and bought to find additions for our squad
We went to other academies, we went to other clubs and I think this shows how difficult it is for our academy to produce Premier League players."
Source : PA