The midfielder, who is on loan at Crystal Palace from Chelsea this season, was handed his England debut at Wembley in what was the nation's most inexperienced team for 37 years.
The 21-year-old grew into the match as time went on and was involved in some neat moves for the hosts, who also handed debuts to goalkeeper Jordan Pickford, forward Tammy Abraham and defender Joe Gomez, who came on as a first-half substitute for the injured Phil Jones.
Germany created the better chances across the 90 minutes, with Timo Werner denied twice from close-range while Manchester City forward Leroy Sane rattled the crossbar from 20 yards.
Jamie Vardy missed a good opening for the Three Lions at the start of the second half when free in the box before Jesse Lingard fired over from six yards out in the dying seconds of the match.
Loftus-Cheek, who was handed the man-of-the-match award, appears to have done enough to get a starting spot for the upcoming friendly against Brazil, judging by the comments made by Southgate.
"It took him 10 minutes to realise he's OK here," the England boss told the BBC. "He is capable of anything."