Put into more simple English, the sentence means: "People who have only lived in England can't even know England well [presumably because they lack an outside perspective to compare it with anything else]".

You can paraphrase the whole line like this: What do we expect the English to know about England, if England is the only thing they know? I think the meaning behind this is that if a person has nothing to compare their own country with (ie. knowledge of other countries), then their knowledge of their own country is very limited. You could even say that, without outside experience, a person may be very ignorant about their own country. You may notice at the end of the first stanza, Kipling describes these people as "yelping" - like dogs. It's a pretty harsh criticism.

Kipling was thinking as a Englishman from the colonial Empire...he means, “those who only have lived in England don’t understand the real ‘Englishness’ it has taken to build the British Empire.” Since my mother was like this, I understand the sentiment.