England return to competitive action in four weeks' time when they begin their Six Nations campaign against Scotland at Murrayfield.
Interim coach Stuart Lancaster, who was appointed following the departure of Martin Johnson after England's quarter-final exit in New Zealand, is set to ring the changes, with the likes of Mark Cueto, Mike Tindall and Nick Easter reportedly set to be dropped to make way for a new generation ahead of the 2015 World Cup on home soil.
With Lewis Moody retiring from international rugby, Lancaster also has to decide who to name captain.
Harlequins' Chris Robshaw and Northampton flanker Wood are thought to be the frontrunners and Dallaglio thinks the latter should get the nod.
"Tom Wood fits the bill," said Dallaglio, who led England between 1997 and 1999. "He just shades it ahead of Chris Robshaw purely because he has spent much more time in the England team and in the international environment."
Moody and Johnson were both criticised for their failure to maintain discipline in the England camp during the World Cup.
But Lancaster's hopes of drawing a line under the discipline issue were dashed when scrum-half Danny Care was arrested for drink-driving last week.
Dallaglio backed Lancaster's decision to drop Care for the Six Nations and thinks England will only have a chance of returning to the top of world rugby if they eradicate their off-field problems.
"Given what has happened over the last six months I don't think any of us could argue with the decision he made (over Care)," Dallaglio said.
"There has been many a player who has been found guilty of that and has not been thrown out of the squad, but he had to given what has happened over the last six months.
"In order to get things right on the field you have to get things right off it.
"That was one of the big mantras of the last England team that won the World Cup; that no matter how big or small these things off the field are, it makes a huge impact on it.
"The way England players conduct themselves in terms of everything, from selection to sponsors, to dress codes, it's all critical."
Dallaglio expects Lancaster to name a number of new faces in his 32-man squad for the Six Nations on Wednesday.
He said: "For those players who are fortunate enough to have their England careers extended after the World Cup, the next game is massive for them because it gives a chance for them and for us to see really how much they are hurting from what happened in New Zealand.
"You have to judge yourself against the best in the world and England weren't up to it in New Zealand.
"The champion players are the ones who really detest losing and I think that there are a number of players who are very good England players who still have a huge amount to offer the team, but that sense of anger and desire must be on show in the first game."
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