Clinton, a potential 2016 presidential contender, warned during her a speech at the University of California, Los Angeles, that "all parties should avoid steps that could be misinterpreted or lead to miscalculation at this delicate time."
Putin has said he was protecting ethnic Russians by moving troops into Crimea.
Clinton said on Tuesday at a closed fundraising luncheon in Long Beach that Putin's actions are similar what happened in the Nazi era in Czechoslovakia and Romania.
Responding to a question submitted at the UCLA talk, Clinton said she was not making a comparison although Russia's actions were "reminiscent" of claims Germany made in the 1930s, when the Nazis said they needed to protect German minorities in Poland and elsewhere in Europe.
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"The claims by President Putin and other Russians that they had to go into Crimea and maybe further into eastern Ukraine because they had to protect the Russian minorities, that is reminiscent of claims that were made back in the 1930s when Germany under the Nazis kept talking about how they had to protect German minorities in Poland and Czechoslovakia and elsewhere throughout Europe," she said.
Clinton said Putin is trying to "re-Sovietize" the periphery of Russia but is actually squandering the potential of his nation and "threatening instability and even the peace of Europe.