Flintoff was preferred ahead of opening batsman Andrew Strauss to captain England's Ashes defence despite not having played since ankle surgery in July.
England's chairman of selectors David Graveney says an important reason for Flintoff's selection was that his panel believed the Aussies feared him.
Former Australian captain Waugh believes Flintoff gives England an extra dimension: genuine inspiration.
"Why not pick Andrew Flintoff?" he told Sydney's Sun-Herald newspaper Sunday. "The players respect him and one of the most important things is that he wants to do the job.
"He's an inspirational player, he's a great all-rounder and I have no doubt he'll be leading them with the idea they're here to fight. I know they'll follow him into battle.
"And one thing about this England team is they are coming to Australia to win, not just with the aim to compete, which a lot of their teams have done in the past."
Australian captain Ricky Ponting and fast bowler Glenn McGrath have both queried whether the extra responsibility would take the edge off Flintoff's batting and bowling.
Ponting admitted his extra responsibilities as an Ashes captain during Australia's unsuccessful campaign in England last year were a juggling act and he thought Flintoff's schedule would be compounded by the amount of training he required as an all-rounder.
Hard-nosed Waugh said Flintoff would need to determine what was important during the gruelling Ashes series.
"He'll have to look after himself out here because it is a long, tough tour -- fatigue could be a factor," he said.
"In saying that, it's important he and the English team will need to look after (fast bowler) Steve Harmison, as well, because he's going to be a key player for them."
Waugh, who plans to go to the cricket for the first time since his retirement in January 2004, is enthused about the coming Tests, starting with the Brisbane Test on November 23.
"It's going to be a great series," he said. "It's being hyped up and I don't agree that's putting extra pressure on the Australians. If anything, it's great for the game."