The German outfit announced earlier today that the Spanish coach had agreed to take charge of the team in the summer on a three-year contract.
Reflecting on the news, Hargreaves described the two as a "perfect match".
"I think it is a smart move from Guardiola. Not many clubs have the stability and structure of Bayern, he saw the success of the club and its facilities, he has looked at all aspects and rightly thought it was the best destination for him," he told BBC Radio Five Live.
"It is a team whose talents lie in the offensive third and in a way, it is the perfect match.
"People can talk about merchandising but the most important thing is the product on the football pitch. Bayern have always delivered that.
The 31-year-old then went on to compare Bayern to another of his former clubs - Manchester United.
"Bayern is easily among the top five clubs in the world, no matter how you rank them," he added. "Bayern are the Manchester United of Germany. They are the biggest clubs in their countries."
Hargreaves left Bayern in 2007 for United, where he spent four seasons.