In short: The performance of English clubs in Europe has improved, the English national team hasn’t changed much, but even there the trend is positive.
Noteworthy stat: since the percentage of foreign players in the Premier League reached 60% (2003), there has been an English team in 7 of the 11 Champions League finals.
It is worth noting, however, that the ban on English teams in European competition between 1985 and 1991 has had an impact on the coefficient. One could argue, as Richard Bellis does here, that the success has as much to do with the successful reintegration of English teams into European competition as with an increase in foreign players. In other words, the coefficient is merely readjusting back to the norm for a dominant country that has been left out of the competition for 5 seasons. Indeed, 7 of the 9 European Cup winners prior to the ban were English.
I don’t think this tells the full story, however – the game has moved on since 1985, and there is little doubt in my mind that the money involved in the Premier League, and the foreign talent it has attracted, has dramatically improved the top teams in the country. Either way, these are the numbers, interpret them as you will.
There is also an argument that the effects on the national team will only be seen in the longer-term. I’m not convinced, however, that the likes of Luke Shaw, Adam Lallana, Ross Barkley, Daniel Sturridge, Raheem Sterling and others are of particularly poor quality, or that frequently competing against foreign talent in the Premier League is detrimental to their development.
*edit – the title of this article and chart is misleading. I am not taking a stance on whether foreigners in the Premier League have been good for English football as a whole (including lower divisions), but have instead chosen to concentrate on the national team and top Premier League teams. Obviously, elite club success does not automatically trickle down.