The World Cup-winner has delivered a glowing appraisal of three members of the Blancos rearguard, while backing his former side to finish the campaign strongly
The former Italy centre-back, who played for the club between 2006 and 2009, explained how the natural ability of the teenage Frenchman, leadership qualities of the ex-Sevilla man and Portuguese's versatility have combined to great effect.
"Varane's great because he plays with the type of composure that is not normal for a boy his age. He comes across as a veteran of the game and I like him because he makes things look simple," Cannavaro told Marca.
"He is already one of the best centre-back's in the world. I know him well and I knew he could get to this level.
"[Sergio Ramos] is a born leader. He is always hungry to win, compete and improve. He's a tough defender and character. He's the best possible partner for Varane.
"Although [Pepe] is now a backup, he shows his versatility when he plays. [Jose] Mourinho knows he can put him in various positions.
"He can play in central defence, right-back and midfield. Not many players can do that."
However, Cannavaro insisted that Varane still has plenty of room for improvement following his mistake in the build-up to Manchester United's opening goal in the second leg of Madrid's last-16 Champions League tie at Old Trafford.
"You also have to understand that there are situations where you have to be more practical," he added.
"It should not have been complicated. I understand that he likes to play with the ball at his feet, but he has to be smarter because he is playing in the Champions League. He cannot afford to make mistakes."
And the Italian believes their progress to the quarter-finals of Europe will yield great confidence at the Santiago Bernabeu.
"In the league, they have not done well. But now you are seeing a team that will strongly compete for the Champions League," he continued.
"What they have done in recent days, eliminating Barca and Manchester, will only make them stronger."