City's neighbours Man Utd were heavily linked with the 27-year-old as manager Louis Van Gaal attempted to bolster his defence.
And former United defender Neville, who is working as a coach at Valencia, has praised City's latest signing.
"In the short time that I've worked with Nicolas [Otamendi] I have seen that he has the abilities and attributes to be a success in the Premier League," he told Breathe Sport.
"He's a typical tough-tackling Argentine defender, and would be a worthy addition to any team."
Manchester City
Nicolas Otamendi was linked with City's neighbours United
In his first interview after the deal was announced, Otamendi revealed his determination to win trophies at the Etihad.
He said: "I am here to give my best, to fight game by game and push City to the highest peaks for as long as possible, and I wish we will be able to win several cups and titles.
"That’s the most important. To be here inside a club that looks so wonderful from the outside is a dream."
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