"I empathise with Harry and William really," she told Sky News Television.
"It is pretty sad, I had a lot of respect for Princess Diana. I thought she was a good woman," 31-year-old Shetty who was at the centre of racist bullying row last year involving the same broadcaster, Channel 4, said.
Shetty said television companies were liable to "stoop to certain levels to get the ratings up" but hastened to add: "Who am I to decide what's right and wrong each to his own."
The broadcaster aired the programme despite an appeal from Princes William and Harry not to air photos of the 1997 fatal crash in the Pont d'Alma road tunnel in Paris in which Princess Diana, her boyfriend Dodi al Fayed and driver Henri Paul were killed.
A spokesman for the princes said the broadcast of the images was "wholly inappropriate, deeply distressing to them and to the relatives of the others who died that night, and a gross disrespect to their mother's memory."
Shetty, winner of the celebrity version of the show earlier this year, is in Britain to participate in the 8th International Indian Film Academy Awards being held at Yorkshire on Saturday.