It happened after the 20-year-old rose to referee Jesus Gil Marzano’s face and listened to him, the Spaniard then fired him for dissent.
But Rice insists that shouldn’t hurt a stellar performance.
James was arguably England’s best player on the pitch, offering lethal crosses, astute defense as well as brilliant touches.
In the end, it was all for nothing as Gareth Southgate’s men crashed in a 1-0 loss.
Danish star Christian Eriksen made the difference, converting a penalty in the first half to give the visitors three points.
He leaves England third in their Nations League group after Belgium beat Iceland in the other game of the night.
And the home side can be accused of poor discipline after Harry Maguire received his marching orders after just 30 minutes after two yellow cards.
With James also sent off, that means he will be suspended for England’s next game.
But when available, the Chelsea star will surely be back in the squad after a fine performance – with West Ham’s Rice amazed at the levels he has shown.
“Reece James looked like she was here for 30-40 caps tonight,” Rice told the BBC’s 5Live after the game.
“I’ve been with him for the under-8s and I know he can do it.
“He’s a fantastic young player and gives us another option to move forward and I don’t think the expulsion should affect the way we look at his performance positively.
” Until [Maguire’s] the send took place, I thought we were playing really well and using the ball really well.
“Reece James and Mason Mount created some great chances for us, but we just couldn’t get the ball in the net. “
James took to Instagram to apologize for his red card, where he received messages of support from Rice and Chelsea’s teammate Tammy Abraham.
The attacker said, “Did your thing, bro. ”
While Rice replied, “Be proud of the way you played brother. “