Merkel told ARD television on Sunday that the German side at the World Cup, in which 11 of the 23 players were born abroad or have immigrant parents, presented a more ethnically varied vision of the country than is often seen.
"It is an example of how role models can be created - role models for our whole country," she said. "For those who are of German origin just as much as for those who want to integrate."
She noted that the ratio of immigrants on the German team was higher than in the country as a whole "but those are our shared idols."
Since Germany hosted the last World Cup in 2006, the chancellor has attended a host of matches, both domestic and international, to support the home side.
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Polish-born Lukas Podolski and Miroslav Klose scored the first two goals in Germany's 4-0 drubbing of Australia in their opening World Cup match last Sunday and Brazil-born Cacau came off the bench for a third. Mesut Özil, whose parents hail from Turkey, has taken over a key role in Germany's midfield.
But Germany slumped to a 1-0 defeat by Serbia on Friday and must now beat Ghana on Wednesday to reach the knock-out phase.