Guardiola's team is set to face Al-Hilal in the Club World Cup round of 16 on Tuesday.
"If Al-Hilal can compete against top teams like Real Madrid in the same way they have, it's because they have a good team," Guardiola said.
Guardiola also noted the improvement of the Saudi Pro League over the past few years, saying that not just Al-Hilal but several other teams have attracted high-quality players.
He pointed out that Al-Hilal's squad includes talented players such as Joao Cancelo, Sergej Milinkovic-Savic, and Moussa Marega, among others.
However, Guardiola stressed that his main priority is to ensure consistency and improvement within his own team.
"I've been focusing on my team's performance over the past two days, trying to make sure we're consistent and recognizable in our own right," Guardiola said.
