If you really want to build a team of players from a single country i'd suggest Italy, Spain, Brazil and maybe France. First three have a lot of solid players around for most positions and I find france produce some very good players.
I don't see you getting any real benefit from it though, squad harmory wouldn't matter much because that increases anyway as players gel together and play more. It could possibly help the national team but then you'd need to probably be in control of that team too making sure you use the same/similar tactics.