The Dane, who spent a decade at Old Trafford, revealed his shock at the decision to retire but believes the Everton boss is the right candidate to inherit the throne.
Sir Alex's decision to step down from his post at the end of the season after 26 years at the helm has led to speculation regarding his successor, with Everton boss David Moyes looking like the most likely candidate.
Schmeichel has thrown his support behind the 51-year-old, believing his achievements after over a decade at Goodison Park, make him the outstanding candidate for the job.
"What we’re looking for is not someone who can come in for 10 months or three years," the Dane told Sky Sports News. "We’re looking for someone who can come in and produce the same kind of stability as Sir Alex has done.
"When we talk about David Moyes, we talk about a man who has spent a decade at Everton with limited funds and done a fantastic job. He’s the kind of guy you look at and think stability. He knows how to stay in a job for more than two years, and I think that’s the most important thing for Manchester United. I think David Moyes sounds like a good solution, but a lot of manager’s names are going to be thrown around in the coming hours and days."
Ferguson will move upstairs to take on an ambassadorial role next season, but Schmeichel admits he is at a loss to explain why his former boss would opt to retire so soon after regaining the Premier League title, conceding that he would not do so without good reason.
"I’m shocked. I just can’t make sense of the timing. It’s come as an absolute bombshell. I really honestly don’t know what to make of it. I’m saddened and disappointed," Schmeichel added. "I was really happy with what we did this season, taking the Premier League trophy back to Old Trafford - ‘taking it home’, as we like to call it, and now this. I’m totally shocked and very sad.
"He always said he was going to retire the day that something in his life wasn’t right. There’s bound to be something we don’t know about. I can’t see him retiring over his hip operation. Until he sits down in front of the media and the world and explains why, we can guess and guess. But there must be something we don’t know about, because he’s not going to retire for the sake of retiring. Absolutely not. It’s difficult to make sense of this, but we’ll get used to this in time, I’m sure.
"I was really hoping Sir Alex was going to stay on for another couple of years at least. I speak to him regularly. He’s bright, he’s fit, he’s not a 71-year-old man."