Australia lost the title after slumping to their fourth consecutive defeat in a five-wicket loss to New Zealand.
South Africa sealed a 3-1 victory over Pakistan to move into top spot with three weeks to go before the World Cup.
"It's a great honour for South Africa, it's come at the right time," the former fast bowler told BBC Five Live.
"They played all right against Pakistan but I still think a few things need to be ironed out before the World Cup starts but this will give South Africa a massive boost, " said Donald, who played in 72 Tests and 164 ODIs for South Africa.
"To win World Cups you need to have 15 players in form, or 15 players that you know you can pick one or the other.
"South Africa are just catching that momentum, they are just moving in with a lot more confidence."
"I think it's anybody's cup this year, I think it's going to be closer than anyone thinks and I don't think one side is going to run away with it"
Allan Donald
Donald said it was difficult to predict the winner of the World Cup, which starts in the Caribbean on 13 March, with pre-tournament favourites Australia suffering a wobble in form.
"Maybe Australia are feeling the heat a little bit because I think there could be a few players who are really tired," he said.
"The timing of it, although Australia will not admit it, going into the World Cup a little bit bruised and a few egos being hurt.
"I think it's anybody's cup this year, I think it's going to be closer than anyone thinks and I don't think one side is going to run away with it.
"England have got such a massive confidence boost beating Australia in Australia in the CB Series after being whipping boys in the Ashes."
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