Manchester United forward Rooney failed to score for England in eight games in the past two World Cups and there have been suggestions from critics that he should not be considered an automatic starter.
But Hoddle, who was in charge of England in the 1998 World Cup, believes England's Group D opponents Italy would be delighted if Rooney was on the bench on Saturday.
"Rooney can finally establish himself as a world class performer and take Brazil by storm over the next few weeks but only if he calms down. He simply must relax," said Hoddle in a column for bookmakers William Hill.
"I would tell him that in order to reach his peak on the biggest stage he needs to relax and play his normal game.
"He tries too hard to live up to his reputation as a world class player and it shows. He needs to be as natural as he can and enjoy himself because although he is a world class talent he hasn't done himself justice... yet," said the former Tottenham midfielder.
Rooney has scored 39 goals in 91 international appearances and Hoddle believes that record, along with the 28-year-old's talent, means England manager Roy Hodgson should start with him in attack.
"When Rooney plays well, England play well. Roy isn't blessed with seven or eight top class strikers - we are pretty thin in that area, more so than I can ever recall.
"If Rooney was on the bench, the Italians would be overjoyed but it won't happen. Roy is far too astute," added Hoddle.
Rooney started all three of England's pre-World Cup warm-up games, scoring in the 2-2 draw with Ecuador in Miami, but he has also become a focus for concern in the English media.
"It's been non-stop knocking Rooney. Well, let me make it clear: England do not have anyone else to go into their opening World Cup tie against Italy with his quality.
"Roy Hodgson says there is a Wayne Rooney fixation - and I know where he is coming from. I had something similar when I picked David Beckham for the World Cup in France 1998, although in David's case it was far more intense.
"People must understand we have nobody better suited than Wayne to playing just behind the front striker, that is the ideal role for him, when he can arrive late into the box," said Hoddle.
"I am convinced he can make the difference for this England team."
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- Wayne Rooney