Schmeichel delivered a superb performance as Denmark on Saturday beat Switzerland 1-0.
Hareide said, "Kasper is now among the top three goalkeepers in the world.
"There are many other good goalkeepers, but Kasper is among the top three.
"Kasper has had a bumpy road to the top. He has his last name and has always been compared to his father. He wants to be Kasper Schmeichel and not the new Peter Schmeichel.
"He is ambitious and works hard. He has stood in Notts County, in Falkirk, has been loaned out and eventually made his breakthrough and went to Leicester, where he has developed into a world-class goalkeeper."