However Panetta said some kinds of renditions of prisoners were "appropriate" and that the US retained the right to temporarily hold and debrief "high value" terrorism suspects seized overseas.
"I think renditions where we return individuals to another country where they prosecute them under their laws, I think that is an appropriate use of rendition," Panetta said.
Obama signed an executive order on 22 January ordering the closure of Guantanamo Bay prison camp and of CIA secret prisons, or "black sites" abroad, although the time frame for the closures remains unclear.
Michael Hayden, the current director of the CIA, has said that the previous administration under George Bush, the former US president, moved secret prisoners between countries for interrogations and imprisonment, separate from the judicial system, fewer than 100 times.
Panetta, who served as White House chief of staff to Bill Clinton, the former US president, also said he considered waterboarding to be "torture" and said it was "wrong".
However he said those CIA officers who had already performed the technique on prisoners would not be prosecuted as they were acting according to the laws of the time.
The Bush White House approved waterboarding, a form of simulated drowning many consider to be torture, for three prisoners in 2002 and 2003.
The CIA banned the practice internally in 2006 and Obama has since also signed an order prohibiting the technique.
Panetta also said that if confirmed he would want the CIA to be able to answer several key questions, including the location of Osama bin Laden and when and where al-Qaeda will next try to attack the US.
"Our first responsibility is to prevent surprise," he said.
Panetta's nomination for the top CIA post has come under scrutiny for having considerable political experience but little knowledge of in intelligence gathering.
However some analysts say that Obama was keen to pick someone who was not "tainted" by association with the previous Bush administration.