The England international has developed into a world-class talent under City boss Pep Guardiola.
Sterling already has six goals this term and Xavi expects him to continue progressing his game.
Xavi told The Mirror: "Messi and Ronaldo have dominated the best-player-in-the-world awards for so many years now, it's hard to remember a time before them.
"Messi is the best ever for me - and even though they're both still playing at a very high level - there will come the day not so long away when somebody else must step into those shoes.
"You look at young players who can be crowned the future best in the world and you still think of Neymar, Mbappe, Salah, and of course Sterling. I look at the moment - and Sterling is winning that race."