The Celtic striker has made an impressive start to the season, scoring his 10th goal in Celtic's 3-0 Champions League victory over Anderlecht during the week, but he did not make it into Southgate's 26-man squad for the upcoming World Cup qualifiers.
Since arriving at Celtic Park from Aston Villa at the start of last season, Sinclair has scored 35 goals in 65 appearances for the 'Hoops', but the England boss believes he has better options at his disposal.
Southgate said of Sinclair: "I had a conversation with (his manager) Brendan Rodgers about him at the end of last season.
"He's a good player but we have good quality in that area of the pitch and, at the moment, I think he is just below the level of what we have already got."
Ahead of the final Group F World Cup qualifiers, Southgate dismissed the idea of player burnout before the 2018 tournament.
He added: "I played in tournaments, I played seasons that involved 45 or 50 games.
"I'm not a huge believer in burnout. I think there's mental fatigue, but physically it's about getting the right level of training, the appropriate stimulus to make sure people are ready.
"We should have enough expertise to get that to the best possible level. That requires all the players to be looking after themselves right. Somebody like Harry Kane will do that.
"He'll do whatever it takes to give himself the best chance, he's meticulous about his diet, meticulous about the way he recovers from games.
"The other night they were able to take Harry off with 20 minutes to go. Those latter stages of games are the ones that have a real physical impact.
"There needs to be some mental switch off at the end of the season but the danger there is, is that you tail off too much and then can't get back."