The 38-year-old believes the Welsh international can become one of the best in his position in the Premier League, and will continue to develop at the Liberty Stadium
The Magpies approached the Swans with a £1 million bid, however the 22-year-old was convinced to stay at the Liberty Stadium and signed a new four-year deal with the club, a decision his manager believes was right for his development.
"When Newcastle came in, I had to confirm to him how I saw his development - as a player you need that," Rodgers said in South Wales Evening Post.
"If you are going to be sat on the bench, you might as well sit there 10 times richer.
"But it wasn't really about salary with Neil and us. Of course he needed to be brought into line in terms of wages, but the most important thing to him in all our conversations was where I saw him in my plans.”
Rodgers has been impressed with the form of the Wales international and thinks if he can keep up the level of his recent performances, he will become one of the best left-backs in the Premier League.
"I said I felt if he played regular football with us he could go on and be one of the top left-backs in the Premier League, and I think he has shown he can do that.
"The great thing is that he is only going to get better."