Advocates are concerned that the men's detention in the centre could become indefinite, with no avenue for them to be returned to their country of origin.
"On those offshore facilities, people have a prolonged, mandatory detention with no possibility of their cases being reviewed by the justice system," Dr Bachelet said.
"That means it can be considered, according to the international human rights law, as arbitrary detention."
She urged the Morrison government to review their refugee and migration policies with "compassion", adding that she had "conveyed the message" to Immigration Minister David Coleman.
"These are people who need help, they are not criminals, they are people like all of us," she said.
"I was a refugee, and then I became president of the [Chile] republic ... I was not a criminal then, I am not a criminal now."
Dr Bachelet came to Australia as a refugee in the 1970s, after fleeing human rights abuses in Chile under dictator Augusto Pinochet.
She later returned to her home country and became the country's first female president, serving from 2006 to 2010 and again between 2014 and 2018.
Last week, Prime Minister Scott Morrison warned against "negative globalism", pushing back against international institutions he claimed "demand conformity rather than independent cooperation on global issues".
"We should avoid any reflex towards a negative globalism that coercively seeks to impose a mandate from an often ill-defined borderless global community. And worse still, an unaccountable internationalist bureaucracy," he said.
"Only a national government, especially one accountable through the ballot box and the rule of law, can define its national interests. We can never answer to a higher authority than the people of Australia."
In response to those comments, Dr Bachelet said the decisions of the UN were mandated by its 193 member states, including Australia.
"I'm not a bureaucrat, but if I am considered part of this international bureaucracy, we implement what the member states decide," she said.
"The owners of the UN are the countries, are the governments, are the member states. So, when a country doesn't like what the General Assembly decides, he can vote against it or he can abstain because that's the rule of democracy."
Receiving criticism, like her comments regarding Australia's treatment of asylum seekers, is a normal part of being a world leader, Dr Bachelet said, reflecting on her time as Chile's president.
"If you are part of a system, sometimes you will be applauded and sometimes you will be criticised. That's how it works," she said.
"As a former head of state ... anytime anybody criticised me, whether domestically or internationally, my first reaction would be to say 'what if it's true?'"
Earlier this week, Dr Bachelet used an address in Sydney to again slam the Morrison government for their treatment of asylum seekers.
"Mandatory detention is a mainstay of Australia's migration and asylum system," she told the Australian Human Rights Commission's Free and Equal conference.
"The people it affects have largely committed no crime; many of them are in very vulnerable situations, and some are children, yet they are subjected to prolonged, indefinite and effectively unreviewable confinement."
She also took aim at Australia's efforts towards gender equality, claiming that women still faced "many barriers", including workplace discrimination, unequal pay and widespread sexual harassment.
With additional reporting from Nick Baker