Watson, along with three other members of the tour party, was sensationally stood down from the third test in India earlier this year after failing to provide then-coach Mickey Arthur with suggestions on how to improve the performance of the team which went on to lose the series 4-0.
Cricket Australia high performance chief Pat Howard subsequently termed the barrel-chested Queenslander as "sometimes" a team player, while Arthur's leaked documents alleged Clarke had described Watson as a "cancer" in the team.
Australia's Ashes victory with two tests to spare on Tuesday seems to have erased all that bad blood, however, with Clarke praising Watson's team-first approach in the second innings of the Perth test where the all-rounder plundered 73 runs from 40 balls en route to a sparkling century.
"What Watto did the other day was put the team first," Clarke said on Thursday.
"He knew we were trying to score as many runs as we could before our declaration and he put the team first which is a great example to the young players that that's what we're trying to do in our team. It's good to see."
The duo reportedly do not agree on Watson's position in the Australian batting order but Clarke felt the all-rounder, who has scored 200 runs in the series, did justice to the crucial number three slot.
"It's obviously a tough position, there's no doubt about it," Clarke added.
"Watto is hitting the ball as good as I've seen."
The fourth Ashes test against England begins at Melbourne next Thursday.