Allegri, after returning to Milan over the summer, now has guided the team to the top of the Serie A table.
Capello told La Gazzetta dello Sport: "I had faith in Allegri's ability, but I didn't think he'd be able to get into the players' heads so quickly, especially considering what happened with AC Milan last year.
"A year ago, the team absolutely didn't know how to position itself and defend. Max was able to bring order and balance.
"The players are the same as last year, but Rabiot and Modric also make the difference, a crucial filter that was missing the previous year."
Capello also stated: "The one who concedes the fewest goals wins, not the one who scores the most. This doesn't mean that we can or should do better up front, and I'm referring to both Milan and Napoli. At the beginning, I saw (Rafael) Leao uncomfortable in the center-forward role, but then the goals gave him confidence, Allegri convinced him, and in the last two games I've really seen him more relaxed, free, and cheerful.
"And then he helps the team, he participates, he's involved and probably also athletically fresher: he runs less because he's not forced to drop back into defence. But he's equally responsible, he knows he has to be more clinical than ever in the penalty area."