Buchanan, who could join the England team as a consultant, was clearly impressed with his trip to the country this month.
"The health of Australian cricket is pretty good on the field but there are things England are doing behind the scenes that suggest to me they are leading the world," Buchanan told The Sunday Times.
"We may not see the effects for three or four years, but if they keep doing what they are doing, they will create a gap between themselves and the rest. Australia need to be mindful of that, and take a leaf out of England's book," he said.
"It doesn't matter who you are, the only way to remain at the top is by seeking to improve, and not relying on what you've got," he said.
Buchanan took over the reins of the Australian team from Geoff Marsh in 1999 and was at the helm during a phenomenal period of success.
He coached Australia during the 2003 and 2007 World Cup triumphs.