Pietersen was released from his central contract shortly after the disappointing Ashes tour, but the decision has been criticised by a number of former England personnel over the past few weeks.
However, Waugh believes that the 34-year-old, who was briefly dropped from the team after criticising former skipper Andrew Strauss to South African players in 2012, was given too many opportunities by the ECB.
"I'm not surprised at all," the 48-year-old told the Daily Mail. "I think it was the right time.
"He had enough strikes - three strikes and you are out. What he did when Strauss was captain was enough really for most players to never play again.
"He was given some extra leeway to get back into the team and I think when you are the best player in the world you can get away with doing some of the things he did. But he was no longer probably in the top 10 batsmen in the world."
Pietersen will return to domestic cricket with Surrey this season.