Dodd expects the 112th to be a 'Congress of oversight'

However, he does hope that Congress will tackle two areas that were left unaddressed in the Wall Street overhaul bearing his name — reform of Fannie Mae and Freddie Mac, and bankruptcy laws.

The need to reform the housing finance system was a calling card of Republicans while in the minority and is expected to be a top priority, if a complicated one, in the new Congress. 

Dodd said that, despite the "mantra" from Republicans in the 111th Congress that Fannie and Freddie needed to be reformed, there was no consensus on the way forward.

"No one knew really what they wanted to do," he said. "I agree totally that we need a different model, but you couldn't find any two people who could agree on what that would be."

Nevertheless, Dodd said, the new Congress has an "obligation" to pass legislation reforming the housing finance system.

"My hope is that they'll move forward," he said.

He added that bankruptcy laws need to be tweaked to address the growing interconnectedness of companies across the globe.

Dodd said the goal of the financial reform package was to establish a new, improved way forward for monitoring the financial-services sector without overly restricting it.

"We want a robust financial-services sector ... but at the same time we want to make sure that horse doesn't run away from us, doesn't run wild," he said. "Financial regulation had simply failed to keep pace."

And, even though he called the Troubled Asset Relief Program a success and "glaringly less expensive" than once thought, Dodd is not expecting Congress will ever consider the same level of bailout.

"It'll be a very brisk day in Dante's Inferno when any Congress would allow another bailout to occur," he said.