Blairite Mr Clarke said that Miliband had failed to produce an "overall story" to explain to voters why they would be better off with Labour in government.
Speaking to the Huffington Post, the former home secretary said Mr Miliband and shadow chancellor Ed Balls were wrong to reject claims Labour overspent in office.
And he attacked the Labour leader and shadow home secretary Yvette Cooper for "ignorant and ill-informed" apologies for Labour's handling of immigration, insisting the party was right to open the doors to workers from eastern Europe in the 2000s.
Mr Clarke rejected suggestions personality issues will prevent Mr Miliband becoming prime minister. Asked if the Labour leader passed the test that voters could imagine him at 10 Downing Street, he said: "He does actually. I think he has a problem with the population, undoubtedly. He is an intelligent man, he'd be a good prime minister."
But comparing him with Lord Kinnock, who took Labour to defeat in 1987 and 1992, he said: "Neil has far, far more qualities than Ed Miliband as a leader. Neil was a fantastic leader."
And he said the "most likely outcome" of next year's general election was an overall majority for the Conservatives. Asked whether Labour could convince voters of its economic credibility in time for the May 7 poll, he replied: "I don't completely exclude it but I think it's unlikely."
Mr Clarke - who served in Tony Blair's government from 1998 to 2006 - said that, under Mr Miliband, Labour was "not remotely near" providing the necessary narrative of where it felt it succeeded or failed in Government. He said critics were right to say Labour spent too much while in power, accusing Gordon Brown of overspending "not very, very dramatically but significantly" between 2006 and 2008.