The veteran Brazilian coach, who returned at the start of the month to coach the team, said the side was in dire need of better spirit and happiness after a run of poor results over the last 18 months.
"Outside the field the preparations for the World Cup have gone well and the tournament is going to be a very good promotion for the country but I am worried about the team," he told a media briefing in Bloemfontein on Monday.
"I have always told people outside the country they are going to be surprised how good this World Cup will be but as the host team we should have as our target at least a place in the next round.
"We are not a heavyweight team. We need to gain some weight and by that I mean we need more experience and confidence. The team needs some spirit and happiness."
Parreira returned in charge for a goalless friendly against Japan in Port Elizabeth on Saturday and has another friendly against Jamaica in Bloemfontein on Tuesday.
"In life sometimes things go right for you, when something falls out of the sky and lands right in your pocket. But when things are not going right you can casually cross the street and get knocked over and that is where the team is now.
"We need to create a winning mood and positive motivation. We need to close the year with a golden key."
Parreira, who won the World Cup with Brazil in 1994, was appointed in 2007 to build a competitive team for South Africa's hosting of the 2010 finals but left 18 months later to tend to his ailing wife in Brazil.
His replacement Joel Santana presided over a dismal run of form and was fired in October after a sequence of eight defeats in nine matches.
Parreira, whose wife has since recovered, agreed to return but said on Monday he had found the team in far worse shape than when he left it in May 2008.
"Some players are now down but we know their ability and need to get them back up again," he added.
