Both countries are expected to come to a standstill on Wednesday with millions of cricket fans glued to the match in Mohali, to be watched in person by the Indian and Pakistani prime ministers despite frosty diplomatic ties.
Miandad, currently director general of the Pakistan Cricket Board (PCB), said it was a "golden opportunity" to increase understanding two years after the 2008 Mumbai attacks killed 166 people and suspended peace talks.
"We should send a delegation including our former great sportsmen and women and some people from the entertainment industry as a gesture of goodwill towards Indian people, that's how people of both countries will come close," said Miandad.
Miandad, who played 124 Tests and 233 one-day matches during an illustrious career, praised Indian Prime Minister Manmohan Singh for inviting Pakistan's prime minister and president to watch the match.
"I have full praise for Mr Singh... I have always believed that people in both countries want to have friendlier ties and more understanding but at times circumstances have dictated something else," said Miandad.
Miandad, who toured India as team coach in 1999 and who is remembered for his last-ball six which helped Pakistan beat India in a one-day in Sharjah in 1986, said cricket had again brought the arch rivals closer.
"I have always believed that cricket has that power and it is something that is a passion in both countries and it can be used as a very positive tool to improve relations and remove misunderstandings," added Miandad.
Miandad said having Pakistan cricket hero Imran Khan doing commentary in India was also a help.
"Imran is very popular in India and I am sure his presence can improve people to people contact. He along with many other Pakistani cricketers are household names in India, so they can play a part. It is tough to say who will win, but my heart says its Pakistan,” said the Former Pakistan captain.
"But Shahid Afridi and his men will have to play with lot of unity and withstand a lot of pressure to win the match and they are capable of doing this. Players should appeal to fans not to overreact in case of their team is defeated. I also appeal to fans to take it as a game and don't show anger," added Miandad.
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