There was already a mission in M&B where you had to train troops for lords and kings, and it was harder. I do agree they could reintroduce the training the peasants thing eventually.
If you'd like a tip; just auto-battle looters until they all leveled up. You won't lose any troops, auto-battle against looters (as long as you have more units than the looters do) only just wounds your troops. Just be careful to not have just barely more troops, have at least 150% of their number.
If you have a hard time catching up the looters, buy horses for your army. The more horses you have, the fastest you'll go. Actually I advise anyone to buy horses early, it's much easier that way. Even if only to trade, you get to places much faster, which means faster profits.