Mercedes, whose drivers have won the last three championships, and Ferrari appear to be in a two horse race for the constructors' title this year. Red Bull are a distant third in the standings, while Ferrari's Sebastian Vettel is seven points ahead of Mercedes rival Lewis Hamilton on top of the drivers' standings.
"There are times when I'd like to see more competition. I think we're leading up to that right now," Stewart, who was world champion in 1969, 1971 and 1973, told Reuters in an interview ahead of the Italian Grand Prix.
"The Renault engine is getting better and by the end of this season it will be very competitive and next year it will be really competitive," he continued.
Renault, which has its own team, powers Red Bull's cars and it may become engine supplier to McLaren next season, a move that could persuade double world champion Fernando Alonso to stay with the team. With McLaren's Honda engine, Alonso has only finished three of the 10 races he started this season.
Stewart also said that despite the sport's push into Asia, it would take at least a generation before drivers from the continent would be challenging for the championship.
"It will take them 20-30 years," he said.
Of Formula One's 20 races, seven are in the Middle East and Asia. However, of the regular 20 drivers, all but four are European, with one each from Australia, Brazil, Canada and Mexico.
"There are no Japanese drivers at the very top either because it takes time. There are more Japanese motorcyclists at the top, who came through the various formulas, smaller engines. They didn't just come in to be the world champion of motorbike racing," Stewart said.
"It's generations to get enough racing drivers in China, enough racing drivers in Russia, enough racing drivers in the United Arab Emirates."
(Reporting By Philip Blenkinsop, editing by Pritha Sarkar)
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