“There’s a lot going on for the young man,” McCarthy told TalkSport.
“We say, ‘oh they should be able to makes their minds up’, but he’s young fella and he’s only just got into the West Ham team.
“I remember saying when I was doing some stuff with Ireland, ‘look, let him get into the West Ham team, let him settle, let him be a first team player and then he’ll make his mind up’.
“I’m still of the same opinion. If he wants to play for me I’ll be delighted, and I’ll be picking him, but I’ve left it with him. I can’t do anymore.
“It’s not my job to decide whether he plays for the Republic of Ireland.
“There was a real issue with his contract [at West Ham] and they got that sorted out now, so I guess he’s got his head clear on that and he can make his mind up.
“My job is to pick him if he decides to play for us, and I hope he does because he’s an excellent player. He’s a player I can build a team around.”
Rice recently committed his long term future to West Ham after protracted contract negotiations with the London club.
Rice came through the academy at Chelsea but moved to the Hammers in 2014 and said that staying with the Irons until 2024 was the option for him.
“Without a doubt, the plan was always to stay at West Ham,” he said.
“I’ve had the support from the fans, from the players and from the manager and now, to get it done and commit myself to this Club is a very special moment and I’m over the moon.
“I’ve now played 50 games for the first team and I’m progressing week-in, week-out, learning from a top manager and top players. I’m still young, so to put more years on my contract and keep developing here is the best thing for me to do now. With the support of the manager, the players, everyone, it was the right thing to do.”