Downing has been one of Villa's most consistent performers in a season of under-achievement which has seen them become embroiled in a relegation battle.
He made his first England start for more than two years in last week's friendly international with Ghana at Wembley and was voted man of the match.
Houllier believes he is capable of being one of Fabio Capello's main performers as Villa prepare for Sunday's home clash with Newcastle.
He said: "I think Stewart has stepped up. I think he's made one step - but there are several steps. He seems to have become a more regular international and is in the squad all the time.
"My aim is to see him playing practically two games out of three for England very soon and to take part in the European Championships next summer. We've been a bit unlucky at Villa at times but Stewart has been consistent and regularly played well."
Source: PA
Source: PA