I have not seen any references to this but this was included in the Kodi nightlies sometime after the first of the year. If you have Mpeg2 videos (DVD format works also) with Closed Captions it is now possible to view them. Download the latest Kodi nightlie and go to System, Video, Subtitle Settings and activate Parsing CC. They will showup after you start the video and activate them via the subtitle settings. I know this will help a lot of people with hearing difficulties and congratulations to the Kodi Team for including this nice feature.
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VLC should work for CC according to this: http://www.closed-captioning.net/turn-closed-captioning-vlc-media-player/
I haven't tried it as I don't have any video with CC AFAIK.
I also saw at another site that the video needed line 21 and that is only on videos at least 720x486 or there is NO line 21 to write to. I can't confirm that.