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Neymar is the top-scorer in La Liga this season with 14 goals, one ahead of his Barca team-mate Luis Suarez.
The Brazilian is in the final-three of the 2015 Ballon d’Or, and Capello praised his development since he made the switch from Santos to European football with Barca in 2013.
“Another player who is improving a lot is Neymar,” Capello said.
“When I saw him playing with Brazil, he was a good player but he played ten minutes and then disappeared. Now he runs a lot, fights a lot.”
Neymar was an integral part of the Barca side that won four of five league games without Lionel Messi, with the 23-year-old scoring eight goals and contributing three assists.
“I think it was really important for Barcelona those two months without Messi,” Capello continued.
“They understood they had to work a lot, run a lot. I saw that the players said ‘We are really good without Messi, we are strong even without Messi and with Messi it’s a plus’.”
Barca are equal top of La Liga alongside Atletico Madrid on 35 points, two above third-place Real Madrid.