The former Premier League manager believes England's top flight may also prove attractive after spells in Germany and Spain.
The Bayern Munich boss has long been linked with a move to the Etihad Stadium, having enjoyed a prior relationship with City executives Txiki Begiristain and Ferran Soriano from his days with Barcelona.
Current manager Manuel Pellegrini has remained in charge after a disappointing campaign last year, though, while Guardiola has decided to stay in Bavaria for the foreseeable future.
But Redknap says there’s no smoke without fire, even though Manchester City aren't necessarily a step forward for him.
"There are rumours that Pep Guardiola will join City next year, there’s usually no smoke without fire," he wrote on Kicca.
"But will he leave Bayern Munich? He’s one of the great managers in world football and if he does move on where does he go? Man City isn’t really a forward step from Bayern Munich."
Manchester City an obvious option
The former Premier League boss does, however, believe the lure of England’s top flight could bring Guardiola to the Etihad anyway.
The Spaniard enjoyed immense success with Barcelona as they won everything available tot hem. Things have not gone as smoothly at Bayern as they did at the Nou Camp and some have wondered if Pep is really the genius he is made out to be without Lionel Messi running the show on the pitch.
As such, Redknapp feels the Premier League may tempt the Spaniard, as he has won both La Liga and the Bundesliga, with Manchester City subsequently being an obvious option.
"He might fancy the Premier League," he added. "He’s done the Spanish and now German league and maybe he’ll think I’ll have a crack at the Premier League and if so Man City would be an obvious option for him, they could afford him."