Tottenham Hotspur made a mistake selling the defender to Hull City, according to the BBC pundit.
Fazio, 27, produced a poor first-half display against Hull City yesterday afternoon, although he markedly improved after the break.
For the Tigers, meanwhile, Dawson impressed Kilbane when facing the Tottenham side that sold him to Steve Bruce over the summer.
“Dawson was the club captain and was replaced by Kaboul, who I don’t think is in his class as a leader able to dictate games,” Kilbane said on BBC highlights show Match of the Day Two.
“He has great awareness and also an ability on the ball. He can pass, he can play.
“I think one or two Tottenham fans might be asking the question ‘why on Earth has he been replaced by Fazio?’
“For me, Michael Dawson is a better centre-half than Fazio and Kaboul. I think you could get another two or three years out of Dawson.”