The pair also play together for Croatia.
Kovacic told City's official podcast: "Joško is special.
"I don't want to overdo it with the praise, but his quality is extraordinary. In Croatia we've always had great midfielders and great central defenders, but he's the kind of player who can do everything.
"Sometimes you don't even know where to put him, because he's so good at going forward, but also exceptional in defence. He's right-footed, left-footed, everything. And the fact that he's Croatian is great for us, because he's a player who can dominate for years.
"If he stays focused and maintains the mentality he has now, he'll be at the top for a long time. It's not easy to arrive at a team that has won the Treble.
"For him, arriving at 21, it's not easy to integrate, because everyone has great confidence in their abilities and you arrive wanting to prove your worth.
"He's been absolutely incredible, and in the difficult moments he's been able to handle them very well for his age."