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.
Ahead of Villa's clash with Newcastle, Houllier 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."
He added: "We've been a bit unlucky at Villa at times but Stewart has been consistent and regularly played well."
Houllier has been used to winning trophies during his distinguished career but is also relishing the challenge to keep Villa in the top flight.
He said: "I think, for me, it is exciting because you always fight for something. It is a bit new to me to fight to escape relegation. But eight or nine teams are in the same position. You sometimes fight for a title or a cup or a place in Europe and we are fighting to escape relegation.
"We've got to be strong enough to stand up to the challenge and take it because we also have to enjoy it. I enjoy every challenge. This job is about pressure, is about tense moments, but at the same time it is also about playing football and being relaxed. We need to focus on the game itself."
Houllier altered his formation in last week's 2-2 draw at Everton with Gabriel Agbonlahor lending support to two-goal Darren Bent upfront. But he may revert back to the 4-4-1-1 formation against the Magpies, who defeated Villa 6-0 at St James' Park in August.
Houllier said: "I'll see the games how they come. I knew that we would pose more problems to Everton playing that way. We'll see game after game but it (the formation) is not set in stone. I prefer to deal privately with how Darren and Gabby played together. All I know is that we scored two goals.
"But it would be hard for you to quote me teams that play two strikers. There are not many."
Source: PA
Source: PA