The former Red Bull Leipzig defender joined the Blues in the summer and has made 13 appearances so far for the Club.
Gvardiol will face his former employers on Tuesday evening as City look to seal top spot in our Champions League qualifying group – and Guardiola is delighted with the contribution from the young Croatian so far.
“I don’t have more than incredible words for him, first how he’s settled, which has been fantastic,” said Guardiola.
“He is an incredible person, like Mateo (Kovacic), and all the new players this season have been top.
“Maybe it’s not easy at the beginning to change one league to another but he’s played at a high level.
“Sometimes they move because they don’t play, but he’s so important.
“Nathan can’t play every three days. We know that, so it’s so important (to have him) and the game in Leipzig was, he unbelievable, I reviewed it yesterday.”
Asked where Gvardiol’s positional future lies in his team, the boss admitted that he may eventually move more centrally, but that he has shown he is a very capable left-back.
“Yeah of course he can play as a central defender, but when we make build-ups with three, he can go in the middle,” he said.
“With Nathan and Josko on the left as a build-up, he is like a central defender.
“The position with three centre-backs is the same.
“In the past I discovered him against Leipzig, playing two or three years ago at full-back. He was really good.”
Guardiola also praised the City fans but says there are times when he feels our fans can make a huge difference in a tight game.
He said: “Our stadium is always full, and we have to play as best as possible and create as much as possible to energise our people.
“I had the feeling the team is playing really good. I reviewed the game versus Liverpool, some clips for the game tomorrow, and many things we did really well.
“I said that after the press conference as well. These guys, what they’ve done for many years, we love to do it together with our people.
“The games last season in Champions League quarter-final and semi-final, or against Arsenal to play for the Premier League. They were there.
“We need that. In my humble opinion, to be successful we need our fans, but all the time.
“Being here, thank you so much for coming and together we’re stronger.
“Be part of our game, and when they are it’s much better. We play better, the people say no it doesn’t, but it depends.
“We have to do it all the time. Tomorrow hopefully they can come and enjoy the game again.”