Cutler sustained the injury -- later ruled a Grade II MCL sprain -- in the second quarter of the Bears' 21-14 loss to the Green Bay Packers in the NFC title game.
"I think they just handled it poorly," McMahon said Monday on "Mike & Mike In The Morning" on ESPN Radio. "I never saw him get hurt. I saw him leave early right before halftime. I think somebody should have come out and said, 'Hey, he hurt his knee. He might go, he might not.' But nobody said anything and I think he played one series and he was gone."
At last month's owners meetings, Bears coach Lovie Smith defended the team's handling of the Cutler news.
Cutler took criticism from fans and fellow players, some of whom used social media to question his toughness for not returning to the game.
"I think if they handled it better, people would have realized what was going on," said McMahon, who played seven seasons for the Bears and led them to a victory in Super Bowl XX. "All they had to do was mention he had a little tweak in his knee or something and it wouldn't have gotten blown out like it did."