Souness, who won 54 caps for his country, said the current squad is not up to the standard of his day.
"Going back to my generation we had players in all the big teams in England and winning trophies in England," Souness told BBC Sportsound.
"We now have a group that's maybe short of that level."
Scotland lost both games in their Euro 2016 qualifying September double header to Georgia and world champions Germany, which leaves them sitting in fourth place Group D.
"I think the manager deserves great credit for what he's doing with a limited group of players," said Souness.
"I don't want to be harsh on the players because I know when you're a Scotland player you go out and give it your lot.
"The manager deserves great credit for gelling them and getting the very most from a group that are limited. That's all you can do as a manager.
"He's got what he's got and he's doing a very good job of it as far as I'm concerned."
Scotland's final two qualifiers next month see them host Poland at Hampden before travelling to face Gibraltar.
The best they can place in the group now is third place which would secure a spot in a two-legged play-off.
However, it is not entirely in their own hands, with a number of permutations needed in other games in the group involving Germany, Poland and the Republic of Ireland.
Souness admitted: "It's never great if you're relying on other people."
Gordon Strachan is doing as best as he can with the talent at his disposal, according to former Scotland captain Graeme Souness.