Currently on-loan with Aston Villa, Rashford can be signed permanently for £40m and Giggs believes the England international has looked happier than he has in years.
He told the Rio Ferdinand presents podcast: "No. I don't think he looked happy at United.
"I think he looks happier now. I just don't. Which is a shame because obviously I'd seen him as a part of the staff when we'd given him his debut."
"Work harder"
Asked what advice he would've given Rashford as he struggled at United, Giggs continued: "First of all, he's got to work harder.
"I talked about no matter what position on the pitch you are, you sprint back as quick as you sprint forward, and aesthetically, it didn't look great. Especially if the team ain't doing well.
"Because fans will forgive you for missing a chance. They won't forgive you for not working hard enough. They just won't. Because they can do that. They can sprint. Everyone can."
"You've got to enjoy it"
Giggs also believed it's important for Rashford to enjoy his football.
He added, "But then also, what I talked about, you know that he can play up there. He's done it everywhere. He's done it on the biggest stage. It's hard from looking outside to in. But it looked like he's not enjoying it.
"And you've got to enjoy it. Especially flair players, attacking players. Because that's your best moments.
"When your confidence is high, you're trying things. Don't always come off. But play instinctively and play like you did when you were younger. Freedom."