At the Euros last year, Germany were eliminated in the quarter-finals by eventual winners Spain in a pulsating three-goal thriller.
They have been drawn alongside Slovakia, Northern Ireland and Luxembourg ahead of the 2026 FIFA World Cup qualifiers getting underway in September and are the Group A favourites.
Matthaus identifies Florian Wirtz and Jamal Musiala as pivotal going forward.
''I think we already have two players in Germany and can be, maybe candidates in the future for the Ballon d'Or. This is Florian Wirtz from Bayer Leverkusen and Jamal Musiala from Bayern Munich - they are outstanding, not only at club level but for the national team as well. Musiala has more than 100 Bundesliga games, 50 games for Germany. They make good entertainment in football, we haven't done so well in about six years in the World Cup, we are on the right track now with these two guys,'' said Matthaus.
What has impressed the legendary Matthaus the most is how Wirtz and Musiala conduct themselves privately as well.
''It is always good when you give them a little bit of time to find their way, no funny headlines because they are still young, they need stability. Musiala is still happy to play for Bayern, not after the Ferraris and the Lamborghinis, I know of youngsters who are after those things. But they must be given a space to learn for themselves,'' added Matthaus.
Meanwhile, Bayern Munich and Borussia Dortmund will be heading to the newly expanded FIFA Club World Cup in the USA at the end of the season.
Matthaus endorses the addition of more teams.
While he will be rooting for German clubs in America a few months from now, Matthaus says he wants to be entertained.
''I support Germany, but I am a football fan and sometimes I am happy for Spanish teams like Barcelona. It is all about entertainment and I always say the best team has to win,'' he expressed.