There was widespread clamour for Foden to be introduced off the bench as England were held to a drab 0-0 draw in Friday's Group B meeting with the United States.
Manager Gareth Southgate was criticised for not utilising the 22-year-old as his side struggled to create chances at the Al Bayt Stadium.
Victory over the USA would have sent England through into the round of 16 but they could not find a breakthrough, only intensifying the calls for Foden to start Tuesday's clash against Wales.
Phillips, who has yet to feature in Qatar having recently recovered from shoulder surgery, believes Foden would grab his opportunity with both hands were he to force his way into Southgate's XI.
"I think, when he is given the chance, he will shine and he is just waiting for that chance," he said.
"He knows it is going to be difficult, obviously, to get into the team after we've played so well so he is just waiting for the right moment and once that comes I think he will kick on and start flying."
Southgate has opted for a 4-3-3 system in both the draw against the United States and the opening 6-2 win over Iran, a game in which Foden did come on as a second-half substitute on the right side of attack.
Phillips, though, feels Foden would do his best work more centrally, telling ITV Sport: "I think Phil can offer a lot of things.
"Obviously he is an unbelievable talent, unbelievable technically and he works hard.
"I think for me his best role is probably as a number 10 - I think in that role where he can float about, get on the ball and do whatever he wants to do.
"You see him when he takes it past people, you've seen the assists and the goals that he's got this year, he's a real threat."
Foden's lack of action has led to speculation over his relationship with Southgate, but team-mate Jack Grealish dismissed the suggestion.
Grealish told BBC Sport: "People always used to say, 'Ah, he's got a problem with Jack' last year or two years ago, and then I come on and it's like, 'Oh, he likes Jack now, who is it next?'.
"And then I know people were saying, 'He doesn't like Madders (James Maddison)' and now Madders is in, so it's fine with him, and then Phil didn't play, so it's like, 'He's got a problem with Phil'.
"He hasn't got a problem with anyone. He speaks to all of us the same. If you're not playing - Phil didn't play the other night - he's still the same with Phil as he is with me, when I came on, or Harry Kane.
"He's not got a problem with anyone. If he did have a problem with someone, you'd know about it."
Grealish also defended Southgate amid criticism of the way he has used his attacking players in the wake of Friday's 0-0 draw with the United States.
He said: "You look at our attack and I'm not going to sit here and be big-headed and say we've got the best attack in the tournament, but it's certainly up there.
"You look at the seven or eight attacking players we have and everyone brings different stuff to the game, so it is difficult for the manager sometimes."