The Omega Pharma-Quick Step rider described the Scot as "one of the nicest guys you will meet" and credited him with reinvigorating the sport in Britain.
"Cycling's grown and there's one face that's been at the front of that - Chris Hoy," Cavendish told BBC Sport.
"He has been continually successful. He had a professional attitude. That's where he has got his success from, he is just a good guy.
"It is easy to see sportspeople with a 'good guy image' but it is not an image with him. He is actually one of the nicest guys you will meet, whether he is riding a bike or off the bike."
Hoy, who won two of his six Olympic golds at the London Olympics last summer, has been competing in the sport for almost two decades.
Cavendish added: "I could not have hoped for a better face to represent my sport through these growing years. I could not have hoped for someone better to spearhead that than him."
Hoy confirmed his retirement during a news conference at Murrayfield earlier today.