Waugh was speaking to former South African Test captain Ali Bacher and, on the subject of cricket greats, had no hesitation in naming Kallis.
"'Of all time?' I asked him," said Bacher, speaking from London on Tuesday.
"Without any hesitation, Waugh said 'yes'."
Waugh told Bacher: "You only have to look at the runs he has scored, the wickets and the catches he has taken for South Africa."
Kallis has scored 13045 runs in 161 Tests for his country, at an average of 55.98 and taken 287 wickets and 190 catches.
His highest score of 224 was against Sri Lanka at Newlands, Cape Town, in January 2012.
The 37-year-old is fourth on the all-time list of most Test runs scored, behind India's Sachin Tendulkar with 15837 from 198 matches, Australia's recently retired Ricky Ponting (13378 from 168) and also retired Rahul Dravid of India (13288 from 164).
Bacher was in London to interview Waugh, at Lords, and former All Black captain Sean Fitzpatrick, at Twickenham, as part of a series of interviews of all-time greats for local broadcaster SuperSport.
"Steve was speaking spontaneously and I feel it was a huge accolade for a cricketer who has been widely underrated.
"Generally speaking, our country has, sadly, never truly recognised the greatness of Jacques Kallis."
Waugh and Fitzpatrick spoke openly with Bacher about their years in sport, both having reached the pinnacle of their respective codes.
No slouch with the bat, Waugh scored 10 927 Test runs in 168 matches before his retirement in 2004, leaving him seventh on the all-time list.
Waugh led Australia in 15 of their world-record 16 consecutive Test wins and to the 1999 World Cup title.
"I believe viewers in South Africa would be only too happy to hear what they both had to say," Bacher said, "particularly about their rivalry with South Africa."