Coach of the Lions during their 2001-03 premiership three-peat, Matthew labelled the Hawthorn claims against Fagan as "crap".
The AFL announced in May no adverse findings against Alastair Clarkson, Fagan or Jason Burt over the Hawks racism investigation.
All three men have strongly protested their complete innocence since the allegations were first published in an ABC report during grand final week in 2022.
After Brisbane bowed out in a thumping preliminary final defeat last year, Fagan has become the first coach to lead the Lions into an AFL grand final since Matthews did so in 2004.
"The reality is you've got to put your life into compartments and therefore that pressure, with that situation that's been overhanging since about this time 12 months ago ... I think you understand how stressful and anxious that makes you, but he's been able to put that aside," the AFL legend said on Thursday.
"I don't think it's made one iota of an effect on his role as senior coach.
"Someone was saying the other day it's also because the Chris Fagan we know, these allegations are just crap.
"That's not the Chris Fagan anyone knows, that's had anything to do with him, including his players.
"So I think it might have even been a bonding thing in a way, that the feeling, the good vibes to a man under pressure, part of your group, has maybe been a slight motivating factor for the Lions players."
Matthews will present the premiership cup to Fagan and co-captains Lachie Neale and Harris Andrews should the Lions defeat Collingwood in Saturday's decider at the MCG.
Dual Brownlow medallist Peter Moore will hand over the silverware to son Darcy and Magpies coach Craig McRae if Collingwood win their first grand final since 2010.
"I think Chris Fagan is probably a decade older than Craig (McRae) but they're very, very similar," Matthews said.
"(Both former) school teachers, what you'd call the friendly uncle type of personality that people gravitate to.
"I think that's where modern coaching is going."
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