The Germany legend feels appointing the former Barcelona coach as the new man in charge at the Allianz Arena was the right call.
The former Barcelona coach had big boots to fill after Jupp Heynckes guided the Bavarians to a historic treble last term, but Ballack feels the 42-year-old is the perfect man for the job.
"It's always hard to set new goals after you win the Champions League. What are your ambitions for the following season...," Ballack told Sky Sport News.
"The change of coach was exactly what Bayern needed. Fresh challenges have arrived with Guardiola. He is absolutely world class. He knows exactly what the players need in every situation. The Champions League game against Manchester City showed that this team still has plenty to offer. That was extraordinary."
Bayern has been in impressive form in the opening months of the season and sits atop of the Bundesliga table, while the club also leads its Champions League group.