Waugh was the captain of the team that beat South Africa in a must-win Super Six match of the 1999 World Cup en route to their title triumph over Pakistan at Lord's.
The game at Leeds against South Africa is still remembered for a dropped catch off Waugh and the way the Proteas crumbled to hand the Aussies a key win.
Steve Waugh says South Africa have emerged as the standout team of the World Cup.
Waugh had made 56 when he flicked a Lance Klusener delivery to midwicket where Herschelle Gibbs took the catch but in his anxiety to celebrate, dropped the ball.
The Australian skipper, who went on to make a match-winning 120 not out, reportedly told Gibbs 'you've just dropped the World Cup mate.'"
Waugh said the current South African side appeared one of the strongest contenders for the coveted crown.
"They (South Africa) had one 'choke' game against England, but since then, have not put a foot wrong," Waugh wrote in a newspaper.
"They have prospered away from the limelight and favourites' tag, and displayed some skill in areas that have not been their forte.
"Significantly among these is spin. They have used the slow bowlers well and, starting with Imran Tahir and continuing with Robin Peterson, the Proteas have proved they can go all the way in the sub-continent."
South Africa will take on New Zealand in the quarterfinals in Dhaka on Friday.