Pakistan forfeited the fourth Test against England following their refusal to play after tea on the penultimate day, in protest of a decision by umpires Darrell Hair and Billy Doctrove to penalise the side five runs for alleged ball-tampering.
At a committee meeting on Tuesday, the PCB removed former captain and respected figure Zaheer for next month's Champions Trophy in India and replaced him with Talat Ali.
The appointment of Ali, who played Test cricket for Pakistan and worked as a match referee, is regarded by some former players as a move to reduce the authority of captain Inzamam-ul-Haq.
"I am really angry at the way the board has humiliated Zaheer," Miandad told Reuters on Wednesday.
"He didn't deserve to go this way. The board is giving out the message that he is responsible for what happened at the Oval Test. This is not the way to treat a great.
"If the PCB feels the Oval incident should not have occurred, then the board officials that were there at the time are equally responsible and should have resigned."
A source close to Tuesday's ad-hoc meeting who wished to remain anonymous told Reuters that the PCB had given Ali more authority to control the players.
Miandad, who played 124 Tests and coached the national side three times, said the board needed to give former greats more respect.
"It is time the government took a look at how the board is run," he added.
"It is strange that the poor performance of the team is being defended now after a disappointing tour."
"Why the board has chosen to ignore the performance of coach Bob Woolmer is also surprising."
England won the Test series 3-0 and rallied to salvage a 2-2 draw in the subsequent one-dayers.
