Bird was speaking after watching the climax of last weekend's Stanford event in Antigua where the Stanford Superstars thrashed England by 10 wickets to win themselves a million dollars each.
"Twenty20 puts bums on seats and has done a lot for the game, it has brought youngsters into cricket ... but what worries me is that it could kill county cricket.
"We can't lose county cricket because that's where our next generation of Test cricketers will come from."
The England and Wales Cricket Board (ECB) has already announced plans to stage two domestic Twenty20 tournaments starting in 2010 and Bird said he was worried about the impact they might have on the four-day, first-class game.
"There could be no county cricket in four years' time, it's suffering with spectators and they're just flooding the market with more Twenty20 games and tournaments," Bird, a county batsman for his native Yorkshire and Leicestershire before becoming an umpire, explained.
He added the growth in the number of matches played by the England team was also having a detrimental impact.
"I remember when a Test match used to be really special, and that's because we would play far fewer."
However, while "disappointed" by England's performance in Antigua, Bird said a definitive form assessment was difficult in such a short format.
"On the night it could have been anybody's."
Bird, 75, achieved global cricket celebrity while standing in a then world record 66 Tests from 1973-1996 and he was also in the middle for the first three World Cup finals.