"But still he is so young to consider among the world's best players", said the Catalan.
Their latest victims, Southampton, were powerless as the reigning champions romped to a 6-1 win at the Etihad - the latest statement outing from a team who somehow only lead the competition by two measly points.
The former Liverpool player's current arrangement expires at the end of next season but there were reports last week that he had verbally agreed a new deal after months of talks.
"He is in incredible form, he is sharp, fast, clever, fighting, decisive, he can play both sides and can play in the middle and receive the ball between the lines and commit the centre-backs with a lot of aggressiveness."
The Sky Blues were leading 1-0 in the Champions League game when Sterling was sent through on goal and hit the deck as he kicked the turf instead of the ball.
Sterling reached 50 goals for the club after scoring a brace that helped City to a dominant triumph, with Sergio Aguero, David Silva and Leroy Sane also among the goals. He's becoming a winning player. "He's 23 and he can be a better player".More news: Smash Bros Ultimate Final Character Roster Revealed
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"Of course", Guardiola said when asked if this was how he wants to see Aguero play.
"In 10 years I was always focused, maybe more than on other things, on defending well".
City raced to a 3-0 lead in the first 18 minutes before Danny Ings pulled one back for Southampton.
"That is the game gone right from the outset", manager Mark Hughes said.
"Watch this, here you go".
But Southampton kept battling and had six shots on target, the most City have faced in the league this season, to offer some encouragement. "You can't overcommit because Man City have the ability to run over the top of you and it gets even more embarrassing".
"In my era we had very physical teams that might have on a disgusting day in November or December, on a boggy pitch, on a surface that wasn't quite so great, you might have been able to intimidate a very good team", Townsend said.