Waugh was all praise for Muralitharan, saying the Sri Lankan should be celebrated for his world-record feat.
"It's a great achievement to get the world record. He should be celebrated for the fact that he has taken so many wickets," said the Australian.
"He makes Sri Lanka a very competitive side. He gets people through the gates to watch the game and he is also a nice guy."
"Who has called him a chucker?" Waugh said when asked to comment on Australian Prime Minister John Howard remarks that the Sri Lankan was a chucker.
"I'm not sure John Howard called him a chucker. I didn't hear him say it, so I can't comment on it," said Waugh, who is in India on a private trip.
"But I can say it's for the ICC to make the decision. It's not up to me or you or John Howard to make that call. They are the governing body and they have to decide," said Waugh, the second-highest scorer in Test cricket with 10,927 runs in 168 matches.
"They (ICC) have done some tests recently that have shown that the 'doosra' is a problem and he can no longer bowl it."
Muralitharan, with 527 Test victims, has been in news since smashing retired West Indies fast bowler Courtney Walsh's world mark of 519 wickets in Zimbabwe last month.
The controversial off-spinner is now reluctant to tour Australia for next month's two-Test series, especially after Howard's remarks.
Waugh believes Muralitharan will be an even more dangerous bowler if he stops bowling the 'doosra', a delivery that spins away from right-handed batsmen instead of coming into them like a normal off-break.
"I think he is a better bowler when he just bowls off-spin and does not bowl the 'doosra'," said Waugh.
"I think it will make him a more dangerous bowler."
Muralitharan faces a 12-month ban if he continues to bowl the 'doosra', deemed illegal by the sport's world governing body.