A summer arrival from Bayer Leverkusen, Xhaka was named captain of Sunderland and has been oustanding during this season's Premier League return.
Rooney said on The Wayne Rooney Show: "Coming back to the Premier League you wonder if he can do it. Obviously with a promoted team as well coming up, what impact could he have?
"But he's probably been the signing of the season. He has been brilliant."
Rooney also stated: "When he had the situation with Arsenal, when he fell out with the fans it showed his character to go and play for Arsenal again.
"To get through that and then go and perform for Arsenal, and then at Leverkusen to be part of a team to beat Bayern Munich to the title for the first time in over 10 years has shown what a good player he is.
"Sunderland have got a very young squad as well. He'd almost be like a father figure and he'll be a big help for the coach as well to be the in-between man as captain.
"And they made a lot of signings in the summer, he'll be a massive help for the manager and with them players, for sure, using his experience."