The comedian and actor told Absolute Radio Breakfast host Christian O'Connell that he is amazed the press thinks people will believe its lies.
"There they are at News International still saying, 'Well, it was just one rotten apple'," Cleese said. "Well, there were three… 28 rotten... and they think we're going to believe then, you know?"
He added: "All the other papers are saying, 'Isn't this extraordinary what's going on at the News of the World?' They're all in it up to their necks!
"But what I love, and I think it's hilarious and it makes me laugh out loud, is that there they are telling these lies and they actually think we're going to believe them."
Talking more generally about the press failing to scrutinise itself, Cleese said of Daily Mail editor Paul Dacre: "Have you ever read a story about him? He's probably one of the six most powerful people in England, but he says, 'I'm not a celebrity'.
"'Why aren't you a celebrity?' 'Well my paper, my picture doesn't appear in the paper'. 'That's because you make sure it doesn't appear in the paper'. I mean, it's all such bulls**t."
The full interview with O'Connell aired earlier this week on Absolute Radio.
The Leveson Inquiry into press ethics continued today, hearing testimony from actress Sienna Miller and author JK Rowling, among others.
> John Cleese: 'Standards shouldn't be decided by the most sensitive'