"If it (English talent) was better than the foreign talent, then we would have gone that route, but it's not. The value for money is on the foreign market," the 46-year-old Sherwood said at a news conference ahead of Villa's Premier League clash with Manchester United on Friday.
Villa's decision to buy foreign nationals was driven by more than just economics, the manager added.
"Some of these foreign boys we've gone for are better than the English ones. They have played a lot more games at a very young age," he said.
"You look at the English boys, they've played five games and cost a mountain ... (compared with) a guy who's played 200 games in Ligue 1," he said.
However, the manager also stressed the importance of the academy system and developing players.
"I think it's the life blood of every team to have a good academy and bring in players through, and I think we've still got that at this club," he said.
"But it's going to take time. It doesn't happen overnight."
Sherwood expects a tough game against Manchester United, but says his team will fancy their chances.
"I expect a tough game as you always do against Man Utd. They have brought in a lot of new players again. We fancy ourselves against them.
"We fancy ourselves against any team. You have to have that mindset," he said.
(Reporting by Shravanth Vijayakumar and Simon Jennings in Bengaluru; editing by Amlan Chakraborty)
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