Sterling hit a hat-trick to move onto 12 goals for the campaign as the Premier League leaders cruised to a 4-0 victory over Norwich City.
10 of those strikes have come since November, with the 27-year-old reaching top form over the Christmas period after scoring once in the opening three months of 2021-22.
Sterling has been Guardiola’s most used player during the Catalan’s time at the Etihad Stadium and the City boss says his impressive contribution to City’s season has proved just how valuable he is.
“I am sure it will be a massive confidence boost for him,” he said after the winger’s three-goal haul at Carrow Road.
“I have known Raheem for six seasons. I know him perfectly well. This season he was outstanding in goals and assists and his contribution to the team.
“During that period there are highs and lows. It’s part of life. Teams are not honeymoons. There are problems and we have to solve them.
“Nobody doubts how important he is. He is showing that. What I want is for all the players to play good.
“If we count the amount games he played since we are together, it is a lot. He was a key player. In the future? I don’t know what will happen. The club decides.
“When the club extends contacts, I give my opinion, but the club takes the decision, always.”
Sterling is one of several players to enjoy a purple patch this season.
Joao Cancelo, Kevin De Bruyne, Riyad Mahrez, Bernardo Silva and Rodrigo have all stood out at various points in the campaign, but Guardiola has reiterated that nobody is guaranteed a place in his team, regardless of form.
The 51-year-old is keen to maintain the morale of his squad, but says what is best for the Club must always be prioritised over the individual.
“Everyone deserves to play but it is my decision,” he added.
“They know it - no one has a guarantee. Even if you play good, you cannot play because I try to handle the squad in the best way possible to win games, but especially for good harmony.
“No one is untouchable. Not even me. The club is above and beyond all of us and what I am looking for is to win games and, for people who travel five or six hours by car or train to see us, a good performance to be provided.
“The best way is for everyone to perform the best they can.”