Despite extensive research into data heterogeneity in federated learning (FL), system heterogeneity remains a significant yet often overlooked challenge. Traditional FL approaches typically assume homogeneous hardware resources across FL clients, implying that clients can train a global model within a comparable time. However, in practical FL systems, clients often have heterogeneous resources, which impacts their capacity for training tasks. This discrepancy highlights the significance of exploring model-heterogeneous FL, a paradigm that allows clients to train different models based on their resource capabilities. To address this, we introduce FedTSA, a cluster-based two-stage aggregation method tailored for system heterogeneity in FL. FedTSA starts by clustering clients based on their capabilities, then conducts a two-stage aggregation, i.e., conventional weight averaging for homogeneous models as Stage 1, and deep mutual learning with a diffusion model for aggregating heterogeneous models as Stage 2. Extensive experiments not only show that FedTSA outperforms the baselines, but also explore various factors influencing model performance, thereby validating FedTSA as a promising approach for model-heterogeneous FL.