Following Sanders' victory in the Democratic primary in Indiana on Tuesday, the Vermont senator sought to assure his supporters that Trump would not reach the Oval Office.
"First of all, never say 'never' in politics, and Bernie is wrong. Donald Trump is not to be discounted. People have discounted him all the way and he's beaten 16 opponents," Rendell told CNBC's "Squawk Box." "I don't take him for granted."
Rendell, former governor of Pennsylvania, said Trump's biggest weakness heading into the general election is his inability to control himself.
"He's a little unhinged," he said. "Yesterday morning, he knows the polls show he's going to have a big victory, Cruz is going to drop out most likely, and he attacks Cruz's father, and he says some fanciful notion that he had something to do with assassinating JFK. Why? Why bring stuff like that up?"
On Tuesday, Trump repeated an unsubstantiated claim during an interview with Fox News that Cruz's father had been with Lee Harvey Oswald before Oswald assassinated President John F. Kennedy, saying that the association should be more closely scrutinized.
He made his comments after the National Enquirer claimed Rafael Cruz had been handing out pro-Fidel Castro pamphlets with Oswald months before the assassination.
Also on "Squawk Box," Republican Judd Gregg said Sanders is overstating the Democrats' odds in the general election, noting that virtually everyone has gotten the election wrong thus far.
Gregg, New Hampshire's former governor, said he supports Ohio Gov. John Kasich, Trump's sole remaining rival after Cruz suspended his campaign on Tuesday. Gregg added that he presumes he'll support the Republican nominee.
Though both parties are mired in divisive primaries, Democrats have a more substantive problem than Republicans, he said.
"We have a candidate who's, you know, a little bit erratic, but they've got a party that is deciding to go down the path which has destroyed country after country after country," he said. "Any country that has pursued a socialist agenda has been destroyed, and our nation's strength comes from our people and our market economy."
Gregg, who also served in the Senate, said he liked Hillary Clinton as a person and called her a "very substantive" senator. But he asserted she has tacked too far to the left and "gone off the deep end" during her primary battle with Sanders, a democratic socialist.
Rendell called that assessment unfair, saying Clinton would preserve America's market economy and combine the right mix of government action and private-sector growth.
He said she has shown she is more economically moderate than Sanders, for example on the issue of the hydraulic fracturing that is anathema to environmentalists.
"Bernie Sanders takes the easy way out, appeals to the base, and says 'I'll ban all fracking,'" Rendell said.
"Hillary Clinton gives an honest and very nuanced and correct answer, and that is that fracking should be regulated with a lot of oversight, but we need natural gas to be a bridge to the day that we can do our electricity and fuel with renewables."