The Spaniard lead City to the Premier League title in his second season in charge.
"It's a mix of the fact that he played at a very high level on the biggest stage with Barcelona and the fact that he's just a great manager and can change his point of view from a player's point of view to a manager's point of view, which is sometimes a little bit different," said Gundogan.
"This mix makes him, at the moment, the best manager in the world in my opinion and I think a lot of players would love to play for him as well. Everyone who plays for Man City should feel privileged.
"He is able to teach everyone and bring you to the next level. Even when he doesn't say anything, it's just his personality. When you see him, you want to try your best to make him happy.
"If you make him happy, you are often happy."