Read warns of 'dangerous' Springboks at World Cup
South Africa and New Zealand were both drawn in Pool C for the tournament in Japan, the first time they have ever faced each other in the group stages.
Read said it would be a "massive" clash and expected the two-time champions to be a much-improved team from the one that has slid to seventh in the world rankings.
"They certainly will be. Across the board, teams perform at their best during a World Cup," the 97-Test veteran told Radio Sport.
"South Africa are a team that, with a couple more years of practising what they're trying to achieve, will be a much more dangerous side."
South Africa made the semifinals of the last World Cup, but only after falling victim to one of the biggest upsets in the tournament's history when Japan beat them 34-32.
They then endured a horror 2016, losing eight of 12 Tests – a Springbok record for a calendar year.
Read, whose side will be chasing a third straight title in Japan, said there was always respect between the teams, who share a 2-2 record in past World Cup meetings.
"It's probably going to be good for us to have a team like that in your pool to get yourself ready," he said.
New Zealand lost to South Africa in the 1995 Final but have won their last two World Cup meetings, including the 2015 semifinal.
Pool B comprises New Zealand, South Africa, Italy, Africa 1, and the repechage winner.
The All Blacks have never lost in pool play, but would be likely to qualify as one of the two top teams, even if they did lose to South Africa.
They have won all 13 matches against Italy, with the most recent meeting a 68-10 drubbing in Rome last year.
Read, who is currently out injured with a broken thumb, expects to return for the Test series against the British and Irish Lions starting June 24.
However, the No.8 said New Zealand's warm-up fixture against Samoa on June 16 was "touch and go".
Agence France-Presse
