Moves to restructure the ICC to hand power to India, Australia and England, the game's financial powerhouses, were passed in principle during a board meeting on Tuesday. (Agencies)
Khan, who captained Pakistan to their sole World Cup win in 1992, said the proposals harked back to the days when England and Australia had effective right of veto at the ICC.
"If I was the PCB (Pakistan Cricket Board) head I would have strongly objected the new colonial system," Khan said.
"I think the answer is to make the ICC more productive for the betterment of cricket."
No international cricket has been played in Pakistan since 2009, when militants attacked the visiting Sri Lankan team, and Khan warned the new proposals would hit his home country hardest.
He said Tuesday's meeting at ICC headquarters in Dubai reminded him of one he attended in 1993.
"Then India and Pakistan were on the same page and they fought to end the imperialism in the ICC and wanted it to be run in a democratic way," Khan said.
"It became democratic until India, because of its big money influence and supported by Australia and England, made it back to square one."
Khan, who played 88 Tests and 175 one-day internationals for Pakistan, said the game was in "genuine crisis".
"There is a lack of quality in players, if you talk of spinners or fast bowlers or batsmen, and unless a correct mix is not found cricket will suffer," he said.
"The revenue is coming but money should not be decisive and that's why the quality is suffering which is disastrous," he said.
Moves to restructure the ICC to hand power to India, Australia and England, the game's financial powerhouses, were passed in principle during a board meeting on Tuesday.