The Magic FM DJ, who worked with Waterman on two series of Pop Idol, said that the quality of contestants on the BBC One Eurovision talent hunt was embarrassing.
"The comparison between Leona Lewis who won X Factor a few years ago and Your Country Needs You!, which was that Eurovision shambles on Friday - I don't know if you watched it, but I've never been so embarrassed watching anything in years," said Fox.
"We have not got a chance of ever winning Eurovision if that is the best we can do. There were people singing on there who were so tone deaf, it really was embarrassing.
"And Pete Waterman didn't say 'that was awful'. He would have said that on Pop Idol."
He added: "An average song and an average singer. Best of luck and all that, but crikey there must be better than that surely."
The Friday night show was won by 19-year-old Josh Dubovie. He will now go on to represent the UK in Norway, singing Waterman and Mike Stock track 'That Sounds Good To Me'.