The former Test batsman worked under Giles in England's disappointing World Twenty20 campaign, which ended with a defeat to the Netherlands, and he believes that the current squad can improve with him in charge.
"It's a tough situation for everybody. I guess it's in a bit of a limbo at the minute in terms of nobody quite knows if there job is safe and all this kind of stuff in all the management," Collingwood told Sky Sports News.
"It was a tough seven weeks away for the guys, but seeing what Ashley Giles does behind the scenes, the amount of effort and work he puts in, he's been fantastic to work behind.
"Barring that last game against the Netherlands which was a huge disappointment - to finish a good seven weeks away with England - barring that game, I thought."
Giles is currently the favourite to be given the job on a permanent basis.