Unlike his appearance in Final Fantasy IV, Cagnazzo does not raise torrents of water or enter turtle defense form in this game. This means Thundaga will do decent damage to him, and the party's Black Wizard should cast this spell after the physical attackers have had Haste and Temper cast on them.
Cagnazzo likes to use his special attack, Tsunami, nearly every turn, which deals about 200 in Water damage to the entire party. The party's White Wizard should cast Healaga after this right away. He may also cast Haste on himself to boost his physical attacks, and may even cast Curaga on himself, although it will only heal him for a few hundred HP and should not be a problem.