So I can not program flash with WinISP if I use external Watchdog Timer. So i decided to use internal watchdog timer
a couple of points:
1) get rid of WinIsp, the repeated entry of values is prone to human error, download FlashMagic from www.esacademy.com (FlashMagic is free, paid for by Philips).
2) Never use an external watchdog timer, keeping an external watchdog alive requires only toggling a port pin which is something that a runaway program very likey might do.

I don't want to put it in timer ISR as it will defeat the purpose of Watchdog Timer.
You are absolutely right, toggling a watchdog by a timer is ridiculous.

There are two option either i need to use PCA module 4 or i have to use hardware watchdog timer
The PCA module 4 watchdog facility is a kluge Intel introduced with the Fx series and very difficult to manage unless you do not use the PCA for other purposes. This watchdog also suffers from the one bit will kill it deficiency which makes it likely that a runaway program will not be detected.

My application need watchdog period of arround 500ms
Maybe you are a bit off, are you running the new chip at the same clock speed as the old one and in 12 clock mode. Calculate the watchdog window in program cycles, not time.

The only time the watchdog time in the Rx2 and 66x becomes a problem is if you have loops of gigantic proportions. 8000 program cycles is a very good watchdog interval. I did, a few months ago the transformation of an old project that ARGH had an external watchdog kicked by a timer interrupt to the RD2 and in the process of the transformation found 3 intermittent software errors that a REAL watchdog would have caught.

Have fun,

Erik

Ps install the feature I show at NoTouch with a touch below, it might save your butt.