I have a DHT11 humidity sensor that the atmega328 will use to read the humidity and temperature and send it to the base station using Rf24L01+ RF module. I want to put this circuit on a battery so I can place it anywhere. To conserve power I was thinking of putting the arduino to sleep and waking it every couple hours or even as long as once or twice a day. Time accuracy is not a requirement. I have been looking at examples of using the WDT and the maximum i have seen is 8 seconds, is it possible to make the WDT count down for longer than 8 seconds?
Why would you a watch dog to "wake" an Arduino? Watch dogs are for handling when code misbehaves.
Maybe you should consider adding a RTC with alarm function...
The maximum time-out interval for the WDT is 8 seconds. However, it can still be used for your purpose. Configure it to generate an interrupt only, not a reset. This will wake the MCU from sleep mode. The code can then count 8 seconds for every wake-up, and if it's not time to do its thing, then it can go right back to sleep. This will all be so fast that it will scarcely have an effect on battery life.