Guardiola, who has managed City since 2016, has signed a new two-year deal that will run until 2027.
City have won six Premier League titles under Guardiola - twice pipping Liverpool teams managed by Jurgen Klopp by just a point.
The Reds finished ahead of City to win the title in 2020, and the two clubs have established one of the main rivalries in the top flight
Slot succeeded Klopp in the summer and has guided Liverpool to the top of the Premier League - five points clear of second-placed City - after 11 games.
Asked about Guardiola's new contract, Slot said: "It's good news for City and for the league because everyone wants the best managers and the best players over here.
"He is definitely one of the best managers, maybe the best manager of the league.
"He's won four titles in a row so it's fair to say he's maybe the best manager in the league.
"On the other hand, they have so many quality players that, if he would have made the choice to leave, I wouldn't have expected them to end up bottom of the league next season."
Slot, speaking before his side's trip to play Southampton on Sunday (14:00 GMT), said Guardiola was "one of the best managers football has ever had".
The former Barcelona and Bayern Munich boss has won 18 trophies at City, including the Champions League in 2023.
Brighton boss Fabian Hurzeler echoed Slot's sentiments, calling it the "best thing that can happen to the Premier League".
Hurzeler said: "He is one of the best coaches in the world. With his ideas, he always brings something new to the football stage and it is always a challenge to compete against him.
"He always adapts quickly, always has new ideas and he can always win the game. I'm very happy because we can learn from him and to compete with him is a big, big experience."
Newcastle United boss Eddie Howe added: "He's contributed so much to English football. He's revolutionised how a lot of teams play.
"I think he's incredibly talented and it's good for the English game that he's still here.
"He will continue to develop and evolve his style and people will potentially continue to follow that. From the competition side, I think it keeps the Premier League as the best in the world."