Denayer joined Scottish giants Celtic on a season-long loan deal from Premier League outfit City in the summer of 2014.
The 19-year-old defender has been an important player for the Bhoys this season, helping them win the Scottish Premiership title and the Scottish League Cup.
The Belgium international centre-back has developed and grown over the course of the season and will return to City in the summer a much better player.
Former Celtic striker Sutton has been impressed with the performances of Denayer and believes that he would play for a Premier League club on loan from City next season.
“Denayer has done decently this season,” the 42-year-old told BT Sport. “I think in the early parts of the season, he struggled.
“Physically he struggles playing up against big guys, but he reads the game beautifully. He is very comfortable on the ball. I wouldn’t be surprised if he goes on loan to a club in the Premier League.”
While Denayer will certainly be missed at Celtic, it will be interesting to see how the Bhoys replace him.
It is clear that the Hoops need to make defensively reinforcements in the summer transfer window, but the question is where they would get top-quality centre-backs.