"I saw some games for Egypt and I liked the way they play," Dunga was quoted as saying by the Brazilian Football Confederation's official website.
"They have a good team, which can't be underestimated."
The Copa America champions have been drawn with Italy, Egypt and the United States in Group B of the competition, which will be hosted by South Africa.
Five-time World champions Brazil are the current Confederations Cup holders.
They beat archrivals Argentina 4-1 in the final of the competition hosted by Germany in 2005.
Dunga also said the group was tough in comparison to Group A that includes South Africa, New Zealand, Iraq and Spain.
"We are in a very tough group. There's no exaggeration if we call it the group of death," said Dunga, who captained Brazil towards winning the World Cup 1994.
"Of course I'd have loved to face easier teams at the start of the tournament, but you can't choose your opponents."
The competition kicks-off on June 14th and ends on 28th.