Pietersen was named player of the tournament in the West Indies two years ago as England beat Watson’s Australia in the final to win the third edition of the World Twenty20 and their first-ever ICC trophy.
Watson said: “As a player there’s no doubt he will be missed — Kevin Pietersen is an amazingly talented batsman.
“In the last (Twenty20) World Cup, he was one of the big reasons why England won it.
“But England have a number of very exciting young guys coming in, who can do a really good job as well.”
He added: “It won’t have too much of a dent in the England side, because they’ll be able to make up for it pretty well,” he added.