The former City favourite, speaking on the Monchengladbach We’re Not Really Here matchday show, Horlock says Cancelo is causing an almost impossible puzzle for opposing teams to solve.
“You don’t expect a full back to turn up in the centre of the pitch and get shots off from the edge of the box," said Horlock.
“It’s scary. I see highlights of the games and it shows where he has touches - how do you deal with it?!
“He creates overloads and has license to go in there and cause havoc. It must be an absolute nightmare for opponents to deal with it and stop it. He’s almost impossible to stop.
“Pep works with these players and they all have so much ability.
“His assist against Monchengladbach was fantastic. Nine times out of 10, when the wide man has the ball and it’s a shorter player in the box, they don’t play it in.
“But now they are and it is no coincidence. Rather than just playing around in the triangles, we don’t hesitate to put the ball in the box when the run is made.
“It was a great ball in and a great headed finish from Bernardo.”
Horlock also praised Guardiola’s rotation policy, with boss regularly freshening the team up with four or five rested players each game.
Horlock believes with City still in every competition, the boss has achieved the perfect balance in his squad.
“You’ve got to rotate,” he said. “There’s almost 60 odd games, so you can’t expect not to do it.
“Most players will end up playing 35 to 40 games, which is equivalent to a full season anyway. The big problem for Pep is if we get to the final then picking that team!
“These players want to be successful and want to win all the trophies on offer - to do that, you have to do it as a squad and I feel they all understand and recognise that.
“You need everybody, even the younger lads who make an appearance in the cup games.”
Fellow guest WNRH guest Paul Dickov echoed Horlock’s thoughts on City’s strength in depth and how it is helping the team challenge on all fronts.
“I genuinely believe that this squad is the best squad in Europe and the best squad equipped to win the Champions League - if we keep everyone fit,” said Dickov.
Five more City games will be shown live on BT Sport in the next month - including this weekend’s Premier League game at home to West Ham - so if you sign up to a BT Sport Monthly Pass then you get five games for £25 (UK viewers only).