The Algeria international was linked with a summer move to Camp Nou, but the former Spain international is happy the winger opted to stay at Leicester City
After being named the PFA Player of the Year for 2015-16, the Algeria international was linked with a move to Camp Nou as well as Arsenal.
But the winger instead opted to stay at Leicester City and sign a new long-term contract with the Premier League champions.
And though Xavi admits he was happy to see the 25-year-old remain at the King Power Stadium he feels he has the ability to go to the next level.
"Mahrez is good enough to play for Barcelona, but I am pleased he decided to stay with Leicester," he told Shortlist.
"He clearly must have had options, but if Leicester had lost their best player after such a big achievement it would have been a shame.
"It will be interesting to see how him and Leicester perform in Europe this season."