That's pretty much the way it's done in FIFA, it's simple and it works.

You can't really argue with it because it's not extremely accurate but it gives a good ballpark figure of how good each team is... Although I'd say that some international teams would be less than 3 stars eg. Romania, Russia, Uraguay, etc.and maybe add in half stars just to give it slightly more accuracy.

I know it's completely stealing FIFA's system but you could just replace the stars with "rugby balls" or "goal posts" it wouldn't really matter