Defoe began his Spurs swansong in fine style on Saturday, scoring in a hard-fought 2-0 win over Crystal Palace.
After months of speculation, Tottenham confirmed this week that Defoe will leave White Hart Lane at the end of February to join Major League Soccer (MLS) franchise Toronto FC.
David Beckham's international career began to unravel when he crossed the Atlantic, but Sherwood thinks standards in the MLS have improved greatly since then, and that Defoe will still be good enough to challenge for a place in England's World Cup squad this summer.
"I think we have to give a bit more credit to the MLS. I don't think it's a c*** league," Sherwood said.
"I think it's OK. Jermain needs to play regularly and he sees that as the place where he will get it.
"I am sure playing in the MLS won't hinder him from being in the England squad. Wherever he plays he will score goals."
Defoe is something of a cult hero at Tottenham.
The 31-year-old is the club's fifth-highest scorer of all time with 143 goals in 362 appearances.
The England striker, who has been at the club for a total of nine years over two spells, has become something of a peripheral figure of late though.
Defoe has started just three Barclays Premier League matches this term, but to his credit he has not kicked up a fuss.
"Jermain is one of the best strikers this league has ever seen and he is a fantastic professional," Sherwood said.
"When he doesn't start he is always ready to come on and when he does come on he wants to change the game and show that he is good enough.
"We have an abundance of options up front. Robbie (Roberto Soldado) has scored goals wherever he has been and Ade (Emmanuel Adebayor) has been good also, so there is competition for places and there will be even when Jermain leaves."
Tottenham made hard work of their win on Saturday. In the first half they were outplayed by Palace, who would have gone ahead had Jason Puncheon not blazed a penalty high and wide following a foul by Mousa Dembele on Marouane Chamakh.
Dembele admits Spurs need to up their game in the coming weeks against better opposition if they are to maintain their push for Champions League qualification.
The Belgian said: "Against other teams we would have lost the game. It's difficult to know why we started so slowly. We were not good in the first half.
"We played sloppy balls. We weren't concentrated. In the dressing room the gaffer told us (at half-time) we needed to concentrate more and work harder and I think we did."
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