"After the war, Volkswagen was destined to become a group owned by the people, with its shares distributed widely. There was not supposed to be a dominant shareholder," Wulff told the daily Die Welt.
"That is why it should be possible to conserve a minority blocking stake, as in the past," he added.
The Europe's biggest carmaker is the focus of a determined push by luxury sports car maker Porsche to prevent new legislation that would preserve the state's veto over strategic decisions and which has sparked tension between European Union and German authorities.
Porsche is in the process of taking over VW, but under a current and a proposed German law, strategic decisions by the carmaker must still be approved by a majority of at least 80 percent.
Lower Saxony, where VW is based, holds a stake of just over 20 percent, giving it a de facto veto over decisions such as plant relocations.
The current law was overruled by a European court in October following a complaint by the European Commission but the German government wants to enact new legislation that would retain the provisions overall, while addressing clauses specifically banned by the court's ruling.
"The VW story is a success story," Wulff said.
"It was made possible in part because Lower Saxony brought stability" to the group owing to its dominant position, he added.