Rodri originally joined Atletico’s youth system as an 11-year-old in 2007, but was released six years later and joined Villarreal, where he would go on to rise through the ranks and become a key member of the first-team before re-joining Los Rojiblancos in 2018 for €25m (£22m/$28m).
Milla, who won La Liga twice with Madrid and once with Barcelona as a defensive midfielder during an illustrious playing career, said the 22-year-old would be a natural fit at City should the club opt to make him their record signing.
"Rodri would fit perfectly at Manchester City, because his coach has an Ajax and Barcelona style and looks for the same idea of play," Milla told Omnisport.
"City has a coach that was influenced at Barcelona. Rodri has the ability and virtues to play that way."
Guardiola is thought to see Rodri as a potential successor to 34-year-old midfielder Fernandinho in the City engine room, offering a similarly disciplined approach to the game and allowing the Citizens’ creative talents ahead of him to flourish.
West Ham's Declan Rice and Lyon's Tanguy Ndombele have also been linked with City, but Milla sees Rodri as an ideal signing for the Premier League champions thanks to his keen footballing brain.
The Spaniard made 47 appearances for Los Rojiblancos last season, scoring three goals as they ended the La Liga season as runners-up to Barcelona.
The midfielder has also earned seven international caps and made his Spain debut in March 2018, coming off the bench in a friendly against Germany.
"We are talking about a player with the ability to read football quickly," Milla continued.
"He also understands what he has to do in each moment, he is intelligent, tactically he never loses his position, and he knows how to play a positional game."