He suggested that said all Guantanamo inmates – about 380 – be absorbed into the US legal system once the facility is closed, saying he preferred established procedures within the federal law or the manual for courts-martial.
He said some leaders around the world were using Guantanamo to hide their own misdeeds, saying the prison was doing the US more harm than good.
"It's a more equitable way, and more understandable in constitutional terms," he added.
Four years ago Powell made the case for war against Iraq for possessing weapons of mass destruction that were never found.
US system
Washington has resisted pressure by rights groups and foreign governments to close the prison and charge suspects in open court.
Robert Gates, the defence secretary, has said that some of the more dangerous detainees should be locked up elsewhere to facilitate Guantanamo's closure.
Some Democrats in congress have sought to close the facility which occupies part of the US naval base in Guantanamo Bay.
But other US legislators feel the prison facility should remain open.
Mike Huckabee, a Republican presidential candidate, said Guantanamo was "more symbolic than it is a substantive issue".
"But I'll tell you, if we let somebody out and it turns out that they come and fly an airliner into one of our skyscrapers, we're going to be asking, how come we didn't stop them? We had them detained," Huckabee said.
He added: "I can tell you, most of our prisoners would love to be in a facility more like Guantanamo and less like the state prisons that people are in the United States."