The former Napoli midfielder looked to be on his way to City, but a last-minute approach from Chelsea changed his mind.
"It would have been a mistake for us and for him if he came here when he wanted to go with Maurizio".
Youngsters Phil Foden and Brahim Diaz both started, although Guardiola says he is yet to decide whether they will remain in his squad this season, or move elsewhere on loan.
The 21-year-old played for Man City on Friday night in their United States tour opener as they fell to a 1-0 defeat to Borussia Dortmund. "English football has signed an exceptional player". We had some good moments. "Tomorrow he is going to play (against Borussia Dortmund)".
Hart, who has one year left on his contract, added: "I'm experienced, I've played at the highest level for a long time, and done a lot of things in the game".
Guardiola admits Man City missed out on ‘an exceptional player’ in Jorginho
Leeds need players and Chelsea have already proved that Leeds are now a club where their top young talent can go to develop in their eyes.
"He's so young and in two years it is another European Championships and then in four years another World Cup", Guardiola said during a press conference during their USA tour.
Guardiola said Sane's World Cup disappointment could "make him stronger".
A video has emerged on social media of the tactician taking on a few of his own players in a penalty shootout. But Guardiola is philosophical about his preparations for the start of the season despite the Premier League opener against Arsenal on August 12, two weeks after their return. He also notes how good a player he is.
"I need to do what's right for me and my family and that's the decision I'll be making", said Hart.