This is the grouping I would do
London 1 - Fulham Chelsea, West Ham
London 2 - Arsenal, Tottenham, QPR
Birmingham 1 - WBA, Aston Villa
Birmingham 2 - Wolves, Birmingham City
Glasgow - Celtic, Rangers
Edinburgh - Hearts, Hibs
Sheffield - Sheff United, Sheff Wednesday
Liverpool - Everton, Liverpool
Bristol - Bristol City, Bristol Rovers
Manchester - Manchester City, Manchester United
Coventry/ Leicester - Coventry, Leicester
Hull/Leeds - Hull/ Leeds
Bradford/Burnley/Barnsley - Bradford, Burnley, Barnsley
Wales - Cardiff, Swansea
Stoke/Derby - Stoke City, Derby County
Nottingham - Nott Forest, Notts County
Tyne and Wear - Newcastle, Sunderland
South Coast - Southampton, Portsmouth
Bolton/Blackburn - Bolton, Blackburn
Wigan/Preston - Wigan, Preston
Ireland Selection
N.I Selection
(This wasn't done purely on geographical, mainly in Birmingham/London sides, I tried to make all teams kinds even)