"I think something the ICC has to look at is whether you need a neutral appointed doctor to make the concussion decision," Waugh said on Fox Cricket.
"Obviously the team doctor of the Indian team made that ruling. I'm not saying he did anything wrong, but I think the ICC need to look at employing a medical officer or doctor who is neutral to make the decision."
The decision has stirred a controversy with former Australia captain Mark Taylor cautioning against abusing the concussion substitute rule, saying it is for the protection of players and needs to be used fairly and responsibly.
Former India captain Sunil Gavaskar, however, didn't find anything wrong in Chahal coming on as a "concussion substitute" for Jadeja.
After the decision, Australia head coach Justin Langer was seen having an animated conversation with match referee David Boon on the sidelines but it was not known whether it had anything to with Chahal being allowed as a concussion substitute.
Australia all-rounder Moises Henriques, however, did wonder if it was a like-for-like replacement.