Latham's book reveals that Labor powerbrokers believed Waugh, the former Australian captain who won a world record 168 Test caps, could eventually become leader of the party.
It says senior Labor figure John Faulkner approached Waugh in 2003, during the Australian cricket team's tour of the West Indies.
"John is sure he's interested, (he) spoke to him about it during his trip to the West Indies last year," Latham wrote in his diary in the lead-up to his crushing defeat at last October's general election, according to extracts published in the Sunday Telegraph newspaper.
The attempt to court Waugh followed Labor's successful recruitment of former Midnight Oil frontman Peter Garrett, the protest rocker who won a seat in parliament at the last election.
High-profile media and public figures were also asked to stand for Labor, which has struggled to counter the popularity of Prime Minister John Howard's conservative government since its election in 1996, according to the exerpts.
However, Waugh -- who was named Australian of the Year in 2004 and Australian Father of the Year in 2005 -- decided not to stand.
He told the Sunday Telegraph he did not believe the Labor approach was a substantial offer.
"I just took it as a casual conversation," he told the newspaper. "There was nothing formal."
Labor frontbencher Robert McClelland said he believed the party, which has been criticised for relying too much on career politicians, needed to widen the net when looking for recruits.
"It is desirable that we expand the gene pool of people we recruit to the party," he said. "If they have some public notoriety as well as credibility all the better, but these are things worth exploring."