The Spaniard became a trusted member of Guardiola's coaching team, which helped the Sky Blues win the last two Premier League titles.
Arteta's growing reputation saw him emerge as a contender to replace Unai Emery at the Emirates, eventually winning the job after a drawn out recruitment process in December last year.
The appointment marked a new stage in Arteta's English journey, which first began when he signed for the Toffees from Real Sociedad in 2005.
Hughes was a flourishing defender when the classy midfielder arrived under David Moyes. And asked if he thought Arteta would become a manager in the future, Accrington Stanley defender Hughes told Tribalfootball.com: "I couldn't see it. He was really quiet but he was the best player by a mile at Everton. But in terms of management I didn't expect him [to do that].
"His English was never the best, obviously he's developed that over the years. But he didn't look like the coaching sort of type in terms of when young lads come in, when you get the players who will give you a tip here and there, and he was never like that. But in terms of standards he was the one in training who set them."
The Spaniard eventually spent six years on Merseyside before joining Arsenal in 2011, a move which Hughes argues came a year or two later than he expected.
"There was a step up from the youth team to the first team, and then there was a gulf in the first-team to him. [Arteta] just never used to give the ball away, hit the standards every single day.
"He wasn't a moaner, I look at Steven Gerrard at Liverpool and I think he would've been the exact same as Arteta was at Everton in terms of they just have a standard everyday, you give the ball away it's not good enough for them.
"I think he got Everton to the next level being the way he was. I didn't think he'd be a manager, but in terms of footballer he was probably the signing that took Everton to the next level in terms of players they brought in.
"I remember watching him in training and he was head and shoulders above everyone in the first-team.
"You get players where you think could they play for the top four and he was the one who you would thought would get a move to an Arsenal or Manchester United, and of course, he ended up at Arsenal. I'm glad he never but he had that move in him two or three years before he did, easily."