The former Barcelona trainer is delighted with the defender's performances in his new position and sees the 23-year-old as a fine alternative to Dante
The 23-year-old has mainly featured at left-back since breaking into the first team at the Allianz Arena, but started at the heart of the Bavarians' defence in both Champions League games against Viktoria Plzen, much to the satisfaction of his coach.
"I am very satisfied with Diego. I have another great left-footed player for the position of centre-back in Diego Contento," Guardiola was quoted as saying by TZ.
"I'd like to congratulate him with his performances so far. He gives me yet another alternative for the position of centre-back."
Meanwhile, Contento was happy to be given the chance to prove his worth in a different defensive position.
"It was a good experience to play at centre-back," the former Germany Under-20 international enthused. "I felt pretty good. The coach decides where I play.
"It is obviously different than playing on the left. You have more responsibility at centre-back, but I think I've done a good job overall."
The defender has made five appearances in all competitions so far this season.