A Legislative Council inquiry on the AFL in Tasmania resumed on Monday.

Ms Squires said she was optimistic the bid would be successful.

"I feel we've put in a strong application," she said.

Ms Squires said it would cost between $900,000 and $1.6 million each year to run a team in the league.

She said there was a $385,000 salary cap for the entire side.

Ms Squires said the team would be a standalone team so it would not be aligned with any team in the AFL.

She said she believed this would not deter Tasmanians for playing with a state VFL side.

Ms Squires said AFL Tasmania wanted to get footballers who had left the state back to play for a state VFL side.

"I believe Tasmanians want to play with a Tasmanian team," she said.

Ms Squires said better grassroots participation in Tasmania would build on the game's sustainability in the state and was essential for any aspiration for a state AFL team to be realised.

"We have made some progress but there remain challenges in shifting demographics," she said.

"The older age groups also continue to encounter challenges. There is only one age group where we have seen a decline in participation and that is in senior males."

Ms Squires said there needed for strong league representation underneath the AFL if there was an aspiration for a Tasmanian team in that league.

She said a successfully run Tasmanian VFL side would send AFL House a strong message for any further bids for a state team in the top-tier league.

Ms Squires said better and increased ground facilities were needed in Tasmania.