The point I'm making is more from the clubs perspective than the players perspective.
If you buy an English player from a Premiership club, by definition he knows the culture, knows the country, knows the league, knows the language (Jon Moncur aside) etc. If you buy a foreign player, you don't know how they will adapt to the culture/country/league/language. Plenty of them may settle but there is still a risk involved, take Reyes for example, looked like a very typical Wenger Boy.... quick, tricky forward etc, decent record in Spain, came over to England and hated it.
Take Liverpool for example, to understand Kenny Dalglish's instructions, unless you are British you've got next to no chance. Now obviously that's not a major factor in how players perform on the pitch, but it all adds up. English players will always cost more than a foreigner of the same ability when being bought by an English club. And because a lot of the money is in England these days, that drives up the price a bit - when selling English players, a foreign club may only value him at £10m and £50k/week but an English club will pay more, so they stay here.