The Paris Saint-Germain forward scored four times in Sweden's 4-2 victory over England on Wednesday, with one of the goals coming in the form of a 35-yard bicycle kick.
Ibrahimovic has often been accused by the media in England of failing to deliver on the big stage, and Larsson admits that he couldn't believe what he was seeing as the striker netted his fourth goal.
"The reaction was, 'what you doing?' But he is one of the players in the world that can do that, and to be the fourth goal as well," said Larsson.
"I know he has been getting some stick back in England but it will be hard after that.
"He has never played in England and he has maybe struggled against English teams in Champions League but I think he is better now than he has ever been and he has shown that for the national team recently, what more can I say - magic."
Larsson's Sunderland travel to Fulham on Sunday.