Blatter, 90, criticised Infantino's decision to create the FIFA Peace Prize award for US President Donald Trump in the lead-up to this year's World Cup, hosted in the US, Canada and Mexico.
He was also critical of Infantino's post-World Cup plans to sell off part of the commercial rights of the competition in the future, which was scrapped after a fierce backlash.
"FIFA is suffering. It is currently led by a person who has allowed himself to be blinded," Blatter told the German magazine.
The Peace Prize, he said, was "embarrassing".
"Why would he do something like that?" Blatter asked. "Infantino awards a peace prize to someone who wages war against Iran shortly afterwards? That's madness."
Blatter said it was easy for Infantino to secure support for his own re-election from national football bodies.
"'If you vote for me', he tells the national associations, 'You will get much more money than before'.
"He is a dictator. People in FIFA tell me that no one is allowed to ride in the elevator with him. He is 'untouchable'."
Speaking of Infantino's World Cup sale plans, Blatter said: "Infantino no longer knows any borders. He doesn't understand any of this.
"I mean, maybe Infantino should be sent to a psychiatric ward one day."
President of FIFA from 1998, Blatter resigned in disgrace in 2015 amid corruption allegations, including accusations he had sought to buy votes for his presidency.
Charges were brought against him, but Blatter was eventually cleared in two trials and was banned from football by FIFA's ethics committee.
Blatter told the magazine he had "no regrets" from his time in charge of the organisation.
The Swiss was also critical of FIFA's decision to suspend a red card awarded to USA striker Folarin Balogun after Trump intervened ahead of a crucial match at this summer's World Cup.
"The red card. That's the worst. Statutes can be interpreted. But rules of the game must apply to everyone, you can't interpret them."
Japanese official Kozo Tashima has announced plans to run against Infantino in his re-election bid, but Blatter named World Athletics president Sebastian Coe as his pick to take over FIFA.
"It is not important who is running. What is important is that the incumbent president is no longer elected.
"Coe was also chairman of the FIFA Ethics Committee. He is a strong personality. A president from the motherland of football, England, would be good."
Blatter said he had not spoken with Infantino since early 2016.
AFP has contacted FIFA for a response.