Misbah, 39, was the only Pakistani batsman to shine with two half centuries in England as the Greenshirts lost all their three group matches to West Indies, South Africa and India.
The team's disappointing performance has led to calls for changes in the squad and for the removal of head coach Dav Whatmore by several former players.
But Wasim, who played 104 Tests and 356 one-day internationals, said while there was a need to rebuild the national side for the World Cup in 2015, Misbah should not be removed from his post.
"I think Misbah has been our best batsman in recent times and in the Champions Trophy," the 47-year-old told Geo News channel on Sunday.
"If Misbah had not stood his ground the way this team batted it could have been bowled out for scores of 30.
"His future should be secure. We need to rebuild with new players."
Zaheer Abbas, regarded as one of Pakistan's finest former batsmen, said a lack of role models for the top order was hurting development.
"Our problem is quality players are not coming through our system. New players don't have batting role models," Zaheer said.
"When we played we had role models to follow. Today India are doing well because their batsmen have role models to build on."
Controversial fast bowler Shoaib Akhtar also waded into the debate and advised the Pakistani board to appoint Australian Tom Moody, the former Sri Lanka coach, as head trainer.
"We need someone like Tom Moody to build a new team. I have worked with Moody and he is someone who can groom champion players and also be a father figure to them," Shoaib said.
- Sports & Recreation