The Swede was in charge of City before Toure's arrival.
City defender Toure, 29, said: "We couldn't have anyone better in charge. He knows what we are capable of, what strengths we have and what weaknesses we need to improve on.
"He's a top-class manager, one of the best in the world. We have a big chance and a great manager. We might be considered outsiders but we can make it."