As the fall-out over Kevin Pietersen's failed bid to return to the international fold continues, Dallaglio offered his support to England's new director of cricket and former Ashes-winning captain Andrew Strauss.
"I think culture is really important in a team, particularly in a sport like cricket," Dallaglio, 42, said on Wednesday at the Daily Telegraph Business of Sport event in London.
"These guys spend a huge amount of time together and trusting each other is very important.
"I know from my own experience both at club level with Wasps and with England that we spent an enormous amount of time putting together a culture and certain values and certain ways of behaving, both together and outside of the team environment."
Dallaglio, a key member of the team that won the Rugby World Cup in Australia in 2003, said current England rugby coach Stuart Lancaster had been faced with dressing room issues when he took over but had worked hard to establish a new team ethos.
He said it was the way forward for English cricket.
"When Stuart took over he had to reconnect the players with their responsibilities and what it means to play for England," said Dallaglio. "He had to relocate the moral compass of the team and the identity of the team, that was the first criteria.
"That took about 18 months, then he could start focussing on performance and we are seeing the benefit now.
Strauss said on Tuesday that Pietersen was not in his plans because of a complete breakdown of trust.
"I wasn't surprised to hear the comments made yesterday about Pietersen," added Dallaglio. "It's a great shame because he has been a fantastic cricket player and scored lots of runs and still is, but the team should come before the individual.
"If England feel they can't cope with Pietersen then that's the decision they have made. People will disagree, but that's the decision they have made and until that changes I think Kevin will be playing in the IPL."
Pietersen, who has scored more than 8,000 test runs, was sacked by England last year following a number of incidents that culminated in the 5-0 Ashes defeat in Australia during which he was accused of being disengaged from the team.
This year's Ashes series starts on July 8 in Cardiff.
(Reporting by Martyn Herman; Editing by Ken Ferris)
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