The German midfielder was the first player Guardiola signed after taking over in Manchester in the summer of 2016.
A knee injury ruled him out for the majority of his debut campaign, but he has since shone in several roles within City's midfield during our back to back Premier League winning campaigns.
Occasionally deployed as an anchor man, Gundogan was utilised further forward against Dinamo and was unlucky not to score with a first half effort that cannoned off the crossbar.
“You cannot believe how good he is,” said Guardiola after the 2-0 victory.
“He is an exceptional player. He can play in different positions, with his work ethic.
“I missed him a lot in our first year here when after a few months an ACL ruled him out for more than six months.
“He is exceptional. He is one of the best signings in this Club’s history.”
City encountered a stubborn Dinamo defence at the Etihad Stadium, who were eventually unlocked by what has become a trademark Guardiola move.
Having worked the ball wide, Riyad Mahrez played it across the face of goal and Raheem Sterling, as he so often is, was there to bundle it home.
For the Catalan, it is the perfect way to score and he admitted the visitor’s resolute defending made the goal even sweeter.
“We don’t have big headers for crosses,” added the boss.
“We play that way for the quality of the players we have in small spaces.
“We believe when you attack inside and put a ball wide and people arrive for the cross, that’s the best way to score a goal.
“It was really nice, but they defended so well. Even for the goal the defender was there. They were so good.
“I didn’t expect them to play so deep, because they didn’t have a shot on target, apart from one or two set pieces.
“But what they did in that part of the pitch was so good. They won duels and anticipated all the time.
“They deserve a lot of credit. That’s why it was an incredible battle.”