"I think first and foremost, I know we've spoken a lot about wanting runs from our wicketkeeper but I think we need to pick the wicketkeeper first," Haddin said.
"The one thing Matthew has done over the last 12 months is his keeping has improved and he's starting to feel comfortable in that role.
"The thing about wicketkeeping these days, it's an all-round spot, you've got to be able to contribute with the bat.
"I think Peter is a wonderful gloveman. I think he's as good a gloveman not only in Australia but around the world so he won't let anyone down.
"It's just about making sure you're doing enough to warrant earning that spot. It's not a spot that Matthew is going to give up lightly and you've got to earn the right to take that spot.
"The challenge has been thrown out, let's see who is good enough and who wins in the end."
The Australia selectors threw down the gauntlet ahead of the opening three Sheffield Shield rounds as they began their search for a wicketkeeper and a No. 6 in the batting order.
Western Australia's Cameron Bancroft has stood head and shoulders above his competitors with the bat, but his status as a part-time wicketkeeper sees him firm as solely a No. 6 option.
Canberra product Haddin played 66 Tests for Australia and played a starring role in a 5-0 Ashes whitewash over England in 2013-14.
"I like the fact the players have had to play under pressure," Haddin said.
"They're about to walk into one of the biggest series Australia play in, the rivalry with England is huge, the theatre behind an Ashes campaign brings different pressure.
"I've liked that they've challenged the players to perform in these first three rounds and it's Matthew's spot to lose.
"He's got guys like Nevill, [Alex] Carey, Bancroft, Tim Paine, [they] all want his job. It's Matthew Wade's spot to lose."