The Blues finished top of table clear by 19 points from second-place Wrexham.
Dunn is happy for everyone at St Andrews, though accepts Birmingham's superior spending power made a difference.
He told Tribalfootball.com: "Yeah, unbelievable season for them. The whole atmosphere of the whole place in itself has changed.
"It was it was pretty good when I was there many years ago. I've probably only been back there a couple of times. I was just walking around the zones and I was like 'wow'. I was with a friend of mine and we were both saying this is unbelievable.
"The whole atmosphere is brilliant honestly."
A club now going places
Dunn admits the spending of Birmingham was a major advantage, though insists the money available still had to be spent wisely.
He continued, "I think budget matters. I think fans matter. But yeah, players still have to perform. The manager, the head coach still has to prepare the team right. But I mean, amazing season for them.
"Too good for the division and obviously wrecks them as well. I think it always helps with the financial clout that's behind these teams.
"They'll be going into the Championship next year and I think that will be the test for them because you're going up against, well, straight away you've got three Premier League clubs that are coming down with the parachute payments. You've got some big clubs in the Championship that have big budgets as well.
"It'll be interesting to see how they get on. But I really do think that what I've seen the other day, they're a club that's certainly going places."
- David Dunn was speaking to Tribalfootball.com on behalf of William Hill