The 79 year old, best known internationally for his roles in cult horror film The Wicker Man and cult TV series The Equalizer, passed away in hospital in November (09) following a long battle with illness.
Pegg, who cast the actor in his 2007 film Hot Fuzz, led tributes to Woodward at a special event at London's Theatre Royal Haymarket, recalling the times he would watch Woodward on TV as a youngster.
He told the star-studded crowd, "I remember thinking, 'Could Edward Woodward be any cooler?'"
Other speakers included Woodward's widow, actress Michelle Dotrice, and beloved British thespian Sheila Hancock, who read the poem The Owl and the Pussycat as a tribute to her late friend.
The 79 year old, best known for his role in cult horror film The Wicker Man, as well as TV series including Callan and The Equalizer, passed away in hospital following a long battle with illness.
Woodward's The Wicker Man co-star Lee has expressed his sadness at losing "a very good friend and a splendid actor," while Robin Hardy, who directed the pair in the cult 1973 movie, adds: "He was one of the greatest actors of his generation, with a broad career on U.S. TV as well as British TV. He was an extremely nice human being."
British funnyman Pegg, who cast Woodward in his 2007 film Hot Fuzz, has also honoured the late actor, taking to his Twitter.com page to write, "So sorry to hear we have lost the great Edward Woodward. Feel lucky to have worked with him."