Xavi, who played his final league match for Barcelona at the weekend, revealed this in an interview with Spanish newspaper El Pais.
However, the Barça legend was reluctant to accept Van Gaal’s praise, telling the Dutch manager: ”Thanks, coach, but don't exaggerate”.
It was Van Gaal who handed Xavi his Barcelona first-team debut back 1998, during his first spell in charge at the Camp Nou.
Xavi would go on to cement his status as one of the best players in the history of FC Barcelona - as well as one of the greatest midfielders of his, or any other, generation.
Xavi is destined to become Barcelona manager
The 35-year-old can finish his Barcelona career by winning an historic treble - Luis Enrique’s side play Athletic Bilbao in the Copa del Rey final this weekend, before the Champions League final against Juventus on June 6 - which would be a fitting end to such an illustrious tenure.
The World Cup winner will then move to Al-Sadd this summer, although fresh rumours suggest he could join French champions Paris Saint-Germain on loan before playing a single game for the Qatari side.
That Xavi told Van Gaal not to exaggerate after being told he was better than Zidane is further evidence the Spaniard is a class act, both on and off the pitch.
Few top-level players in world football are able to speak so engagingly about football, and this is one of the reasons why many in Spain are convinced Xavi will coach Barcelona in the future.
Like his former teammate and manager, Pep Guardiola, Xavi is keen to experience something different before hanging up his boots.
Guardiola had spells with Brescia, Qatari side Al-Ahli and Mexican outfit Dorados before returning to the Camp Nou to coach Barcelona B in 2007.
Zidane was better than Xavi
But while it’s widely accepted that Xavi is one of the greatest midfielders of all time, was Van Gaal right to tell him he was better than the extraordinary Zidane?
The retired France international, who infamously bowed out of football in disgrace after being sent off in the 2006 World Cup final, was a genius with the ball at his feet - capable of making the seemingly impossible look relatively straight-forward.
Arguably the most elegant footballer of all time, the hugely successful Zidane managed to turn football into an art form.
Although Xavi finished his career with more trophies, he failed to capture the imagination in the same way the magnificent Zidane did.
Who was the better player at their peak: Xavi or Zinedine Zidane? Let us know your thoughts by leaving a comment in the box below!