The Aussie all-rounder, who has also played under Dhoni in Chennai Super Kings (CSK), praised Virat Kohli's captaincy, saying he has done a great job with the Indian team.
"He (Kohli) has done a great job with the Indian team. He has been playing so well in all formats. Whatever he is doing right now is certainly working and the team is responding to his leadership," he added.
When asked if India could dominate the cricket world the way Australia did under Steve Waugh and Ricky Ponting, he said: "it is going to be hard to replicate..but there is no reason why India can't do it."
"There is no doubt that India has got the depth in all facets... batting, bowling and fielding. The depth in Indian cricket is incredibly strong. It has got the luxury of having someone like a Rohit Sharma opening the batting and scoring lots of runs. The depth in Indian cricket is incredible... I am sure this team can win away from home as well," he added.
Watson said that Australia has become a strong side after the return of Steve Smith and David Warner from ball-tampering bans.
"The Australian team has had its issues in the last year or so. Now that Steve Smith and David Warner have come back and settled well, it has got a very strong team. There is a really good No.3 in Marnus Labuschagne, who did a great job during the Ashes. The fast bowlers are very good and there is depth in the department and Nathan Lyon is performing too. We have got strong depth," Watson opined.