The Manchester City full-back has seven assists in the Premier League this season and is regarded as one of the division's top defenders.
Only Liverpool duo Trent Alexander-Arnold and Andy Robertson are outperforming him and Neville knew of his talents before most others in England.
He managed Cancelo for four months during his time in Spain and told his old club there was a special player in there.
Speaking about the 27-year-old on Instagram Live with Jamie Carragher, Neville admitted: "He’s unbelievable, he’s brilliant.
"I think Cancelo is a brilliant full-back. I never had any doubts when I was at Valencia for those four months that he was going to be a top player.
"I literally told United about him. I said, 'Honestly this boy is someone special you’ve got to look at getting him.'"
Louis van Gaal was United manager at the time and their full-back options included Antonio Valencia and Ashley Young, veteran wingers who dropped back.
Cancelo would spend a season on loan with Inter Milan and his performances in Serie A caught the eyes of Juventus.
They'd pay €40 million to bring him to the Allianz Stadium in 2018 and after a year there, he'd move to City for €27 million plus Danilo.
Neville continued: "And then he went to Juventus to be fair, [Valencia] sold him for £40million to Juventus, and then obviously City bought him for £60m. He went to Inter Milan [on loan] as well.
"He had two big moves, he’s got massive experience now, he’s got great courage on the ball, left and right foot, brilliant player."
Since moving to the Etihad Stadium, Cancelo has won the Premier League and Carabao Cup, while also making last season's PFA Team of the Year.
Pep Guardiola has improved Cancelo by leaps and bounds and he can play on either flank.
This campaign has seen him function on the left with Kyle Walker on the right.
City are on course to win their fourth title in five years and know victory over Aston Villa on Sunday will see them crowned champions.
Their closest challengers, Liverpool, have two games remaining and take on Southampton on Tuesday before welcoming Wolves to Anfield this weekend.
Featured Image Credit: Gary Neville/Instagram & Alamy
- Gary Neville sparks outrage online after liking tweet about Mason Greenwood's dropped rape charges
- Gary Neville explains why Arsenal won't win the league as he and Jamie Carragher give their predictions
- Gary Neville reacts to Gunners fans calling on petition to have him BANNED from commentating on Arsenal matches
- Gary Neville tells Man Utd man to be more like Man City star after Nottingham Forest victory