Low has been in sole charge of the German national side since 2006, leading them to at least the semi-finals of three successive international tournaments.
Keegan believes that Low has been repaid for his faith in quality youngsters with a world-class team, but still expects a South American side to triumph at next summer's World Cup finals in Brazil.
He told the German football association's official website: "He is an exceptional tactician. People were already beginning to realise that during the 2006 World Cup, when he was Jürgen Klinsmann's right-hand man.
"Jogi Low has led Germany back to the pinnacle of world football. I admire the faith he puts in young players, he trusts them, plays them and most of them repay him with world class performances on the pitch.
"Germany has a whole host of young talents who could become world class stars. "This young Germany team play incredible football at a very high pace and at a technically high level, but I don't think a European side will win the World Cup in Brazil. The conditions are too tricky."
Keegan has a strong relationship with German football after spending three years at Hamburger SV, leaving Liverpool for the Bundesliga giants in 1977.