Westaway, speaking after the Saints inducted club great Robert Harvey into their hall of fame on Saturday night, said Watters was doing a brilliant job.
The president's endorsement came after the Saints season record worsened to 1-5 following their 26-point loss to Collingwood.
"One special thing I have to say about the club at this particular stage from the heart – I can smell potential. I know there is a breakthrough coming," Westaway said.
"The young blokes are doing us proud and I think Scott Watters is doing a brilliant job."
While Harvey was honoured as the latest hall of fame inductee, existing members Neil Roberts, Ross Smith and the late Trevor Barker were elevated to legend status.
Harvey helped Collingwood triumph over the Saints on Friday night in his role as a Magpie assistant coach, and he thanked his first coach Darrel Baldock, among others, for his contribution to his lengthy career.
"He instilled a lot of faith in me when I didn't have a lot of confidence early on," Harvey said.
"He guaranteed I played the first year and a half without being dropped, and it was just a real confidence boost for me and a luxury I probably didn't deserve."
The four-time best and fairest winner retired at the end of 2008 after a career that spanned 21 years and 383 games.
Harvey holds the third highest games tally in VFL/AFL history and two Brownlow medals, won in 1997 and 1998.
Harvey also recalled how, when he arrived at the club as a 16-year-old, the late Barker had made a lasting imprint on his feelings towards the club.
"He really took me aside and showed me what it was like to love a club passionately, like a guy who lives through the 80s and a lot of really poor times and the club being on the bottom of the ladder," he said.
"He showed me the passion and the pride in this club and how historic it is, and how much it meant to him. That rubbed off on me really early.
"As much as we weren't winning a lot of games, he was fantastic to me and he really loved the club and supporters. I really thank him for that."
Barker was remembered by captain Nick Riewoldt as an individual who "truly embodied strength through loyalty", with the "countless hours" he spent holding football clinics and doing promotional work for the club.
"The highlight reel shows he was the perfect tackler, kicked accurately with either foot, and when he went into attack, he'd kick a goal from any angle at any distance," Riewoldt said.
"Those who played with him said he was the St Kilda football club for much of his playing career.
"His life was clearly cut short but I think we can all be thankful that we got to experience Trevor Barker at all at this wonderful football club."
Colin Carter, a former teammate of Barker's, recalled him as a person who remembered birthdays, sent out handwritten Christmas cards, never missed signing an autograph and replied to every fan letter he received.
"I just know that Trevor would say, in his own words, that he would be very honoured and very humbled to accept this award from a club he served so loyally and courageously," Carter said.
Barker, a former club captain, played 230 games from 1975 to 1989 before he passed away from cancer in 1996, aged just 39.
The club's best and fairest award is named after him.
Barker, Roberts and Smith join Baldock, Ian Stewart, Allan Jeans and Tony Lockett as official legends of the Saints.
Jennifer Phelan is a reporter for AFL Media. Follow her on Twitter @AFL_JenPhelan.
