Capello The Coward!
The FA had said that they did not want Real Madrid's home ground to be used as a venue for the proposed friendly after some of England's players were racially abused the last time England played there in 2004.
But former title-winning Real boss Capello, who had requested the fixture, has distanced himself from criticism of the choice of grounds by the Spanish Football Federation.
Capello: "It is a mistake by the FA's director of communications (Adrian Bevington). I don't know how my name has appeared in this.
"Why wouldn't I want to play at the Bernabeu? It is my home. Everyone knows I love Spain. I have a house in Marbella and I love Madrid, a marvellous city where I have spent two unforgettable years.
"I don't decide where England plays. It is a decision the English FA and the Spanish Federation will have to agree on. I don't care where the game is played and obviously if it is at the Bernabeu all the better."
Liverpool's Champions League away game against Atletico Madrid will be held at a neutral venue because of similar racist chanting by Madrid fans.
Atletico have been hit with a three-game stadium ban by UEFA following "crowd incidents" during the Champions League game against Marseille on October 1.
Atletico must now play their next two home games - against Liverpool and PSV Eindhoven - at a venue at least 300 kilometres from Madrid.
UEFA spokesman William Gaillard said: "This shows our renewed determination to show zero tolerance towards racism. We had a great Euro (2008) with outstanding fan behaviour and we want our club games to be played in the same spirit.
"We think sanctions like the ones we have taken are conducive to making it possible for clubs and national teams to play in Madrid without this kind of threat of racist behaviour."