Lord Turnbull made the comments while being questioned by the Commons public administration committee on Thursday.
MPs went on to ask him if a former head of the army could be objective when assessing cuts to defence, to which Lord Turnbull replied: 'You talk to admirals and they are incandescent at this.'
The comments represent yet further complications over the decision by David Cameron to have General Dannatt potentially serving in a future Tory government.
When it was first announced during the Conservative party conference earlier this month, shadow home secretary Chris Grayling misheard a BBC journalist's question and presumed the appointment had been made by Gordon Brown to the government.
The misunderstanding led him to quickly dismiss it as a 'political gimmick' a position he was quickly forced to withdraw from when he realised it was in fact a Tory appointment.
Lord Turnbull was head of the civil service and Cabinet secretary between 2002 and 2005, when he was replaced by Sir Gus O'Donnell.
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