The Aston Villa starlet has represented Ireland at Under-17, 18 and 21 levels but resisted pressure to feature for their senior squad, instead asking for time to make a decision.
"It was a difficult decision for him - he's been nurtured by the FAI at youth levels," said the former Everton midfielder.
"I'm disappointed because he would have been a great addition to the squad… He decided himself that he wants to play for England and I respect him for it.”
Kilbane also thinks the 19-year old would have been a prominent member of the Ireland squad, while doubts remain over his ability to break into the England set-up.
"He would probably have been in the Ireland team now. Unfortunately it's not to be from Ireland's point of view,” added a man with 110 caps for Ireland.
"Hopefully for him he'll go on and have a successful career with England."
Attacking midfield isn’t exactly an area England are short in, with the likes of Raheem Sterling, Alex Oxlade-Chamberlain and Ross Barkley among those vying for places.
Grealish faces a tough task to force himself into the mix, but his decision to choose the country of his birth is an indication of his considerable self-belief.
The Villa man now needs to produce for his club and add consistent end product to his game if he is to make a splash on the international scene in the near future.