"I think Australians need to be for Australians, Americans need to be for Americans", she told broadcaster ABC while on a speaking tour of the country.
Mrs Clinton said liberal democracies like Australia and the United States were locked in a global struggle with illiberal democracies, countries where while people may get to vote, they have few civil liberties and lack full knowledge about the activities of those in power.
"It just dismayed me that for you, this ended up with chants of "lock her up" or "string her up" at Republican rallies", Gillard said.
"We have an interest in making sure that decisions that are made by our governments are not the result of some influence peddling by a foreign power".
In December, Australia's Prime Minister proposed banning foreign political donations, citing "disturbing reports about Chinese influence".
She said: "Whether it's Russian Federation in a secret way interfering with our election and producing more than 3,500 ads to try and confuse our electorate to try to damage me, to the Chinese looking to influence policy, we should say no".
Speaking in Sydney on the second and final night of her fleeting visit to Australia to promote her book about her failure to defeat Donald Trump in the 2016 U.S. presidential election, Mrs Clinton warned of the "rising tide of illiberalism", particularly in Asia.
"I am pleased to see diplomacy blossoming with Korea but I hope we all remain clear eyed about how hard these negotiations will be and how often North Korea has broken promises", she said. During our training exercises we were presented with leering, Oriental-faced targets to fire our bullets into, and straw-stuffed Oriental effigies to rifle-bayonet away to our heart's content.
President Trump has been inconsistent with his comments on potential Russian meddling.
Clinton said despite deepening trade relations with China, democracies could not ignore foreign interference.
On "The Story", Martha MacCallum and her panel discussed the latter remark, noting that it may have been a veiled shot at Trump and adding that the president also mocked the looks of a conservative woman in former HP CEO Carly Fiorina.