However, his plan to add Premier League B teams into the Football League is in doubt after a report said the reaction from clubs was "not favourable".
"If you go to Germany or Holland we are miles behind in terms of facilities and the number of coaches," said Dyke.
"It is clear we have a real problem with pitches. Local authorities' budgets are being squeezed and most of the pitches are owned by them," added Dyke, speaking as the FA Commission issued its second report after a year-long look at improving English football.
"The maintenance of these pitches is not as good as it used to be and over the last two years there have been swathes of games called off, so it's a real issue.
"There's a degree of crisis in what's happening in grassroots football. Facilities are being lost and local authorities have come to us and said 'what can we do about it?'"
Dyke, who has set the England national team the target of winning the World Cup in 2022, wants to create football "hubs" in 30 cities by 2020 and increase the number of top-quality 3G artificial grass pitches in urban areas by 130% to more than 500.
A pilot scheme was unveiled in Sheffield on Friday and will be followed by similar schemes in Birmingham and Liverpool.
It is likely to cost about £50m a year to reach the required target by 2020 - but Dyke is confident the scheme will find plenty of backers, including the Premier League, local government and private companies.
"We will put some money in, and we hope government will put some in and local authorities will as well," added Dyke.
"The Premier League already puts money into football facilities, but we hope that will increase as the years go on. We're building 25 of these pitches a year but we need at least 100 a year."
Premier League chief executive Richard Scudamore said: "We were consulted by the FA chairman's England Commission as part of its research into the provision of grassroots facilities and coaching, and welcome proposals to enhance both areas.
"Getting this right is imperative to the good health of the game at all levels - players like Raheem Sterling and Calum Chambers have to start off somewhere.
"The Premier League and our clubs will keep playing our part to help ensure the provision of top-quality facilities and coaching is delivered where it is needed most and will have greatest impact."
Artificial pitches The Football Association is keen to increase the number of artificial pitches in urban areas
Sports minister Helen Grant added: "I welcome the FA's plans to strengthen the game at the grassroots through improved facilities and coaching.
"I'm keen to see what more we can do to help further improve the nation's facility stock, putting 3G pitches in places that need them most, and I am continuing discussions with the football authorities."