In an extract from his new book published in the Guardian, Scholes picked out Manchester City trio Sergio Aguero, Kevin de Bruyne and David Silva as being the only Premier League players he would place among the game's elite, and said that La Liga had more quality on offer.
Scholes, who won the Premier League 11 times with Manchester United and now works as a pundit, said: "You hear about people saying English football's the best football there is around. I think Spain's by far the best league. Germany has better teams.
"The Spanish league's the best by far if you're judging on the European competitions. In the quarter-finals of the Champions League and the Europa League in 2015–16, they had six of the 16 teams. Nearly half of them. The Premier League had just two.
"There needs to be a real step up in quality in England. Other than Sergio Aguero, Kevin De Bruyne and David Silva, we don't have the best players. All the best players are in other countries.
"The best players are in Spain or at Bayern Munich and Juventus. We're linked with big players – Gareth Bale is a top player – but we don't get them now. Not anymore. You never see a Lionel Messi coming over here, you never see a Neymar in the Premier League."
The 41-year-old, who is co-owner of Salford City along with former team-mates Ryan Giggs, Nicky Butt and Gary and Phil Neville, admitted that negative football in the Premier League was giving him doubts about embarking on a career in management.
He said: "In the Premier League in the last two years, have I really seen a game of high quality? A game that I've thought: "Wow!" It's difficult to think of any.
"The money's the most important thing these days about football because owners, the majority of them, are just interested in making money for their football club. They don't care what they see on a Saturday afternoon on the pitch. They're purely businessmen, whereas at Barcelona you have a balance between business and football.
"It's a club that is a cooperative owned by the fans, not by one businessman or a group of individuals. That's why they have the best players. And why clubs like that are the best teams."