The coach spent two stints at Barcelona - for three years until 2000 and between 2002 and 2003 - and during those spells introduced the midfield duo into the first team from the youth squad.
Xavi and Iniesta were crucial in Euro 2008, World Cup 2010 and Euro 2012 and remain prominent members of La Roja's setup and Van Gaal believes that his team's opponents have him to thank in part for their success.
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"They have developed themselves fantastically well since we worked together and these boys - Iniesta, Xavi and the others - have for many years been the basis of this successful Barcelona side.
"So I am proud and happy, too, that I still have a good relationship with them. I saw these boys playing for Barca B and I brought them into the first team.
"This was the case with, for example, Victor Valdes and Pepe Reina. They developed into top goalkeepers, as you can see at the moment, but I also brought on Xavi, Iniesta, Carles Puyol ... and we shouldn't forget Thiago Motta, who you now see playing for the Italian national team.
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"It was a little bit double-edged," the soon-to-be Manchester United manager said. "Netherlands were there but there were also five players in the Spanish squad that I trained and coached. In the Dutch squad, there was only Arjen Robben and [Mark] van Bommel.
"So you feel, well, maybe I have to support the Spanish team, although your nationality is Dutch and, in the end, that made my mind up. But when Spain won I was proud, that's for sure."
Netherlands face Spain in Salvador on Friday before subsequent clashes with Australia on June 18 then Chile on June 23.