The Magpies trailed to Edin Dzeko's eighth-minute strike when midfielder Tiote unleashed a rasping shot past City goalkeeper Joe Hart only for the effort to be disallowed, with Newcastle going on to lose 2-0.
Replays showed that Yoan Gouffran was one of three Newcastle players standing offside as the ball flashed in and after consulting his linesman, referee Mike Jones ruled out the 'goal'.
Former Newcastle and Manchester City midfielder Hamann was at a loss to explain the decision.
"I don't see any reason why the goal shouldn't have been given because clearly the referee is in a better position than the linesman," he said. "He must know that no-one is in Joe Hart's line of vision.
"I don't know why the referee did ask the linesman to clarify the decision. Gouffran is in an off-side position but he's not in Hart's line of vision.
"People talk a lot about referee's taking time to think about a decision. I think that sometimes they can take too much time. The referee should have gone with his instinct and given the goal.
"Newcastle have been done because the linesman didn't give the off-side decision at first. I don't know what question the referee asked to make him change his mind because if he thought there was a nick off Gouffran he should have given it as off-side straight away.
"The goal should have been given 100 per cent - there was no reason for the officials not to give it."
Fellow Sky Sports pundit Jamie Carragher agreed that Newcastle were "unfortunate", adding: "That disallowed goal lifted everyone.
"Before that Man City were on top and totally in control. I know they will be disappointed that it wasn't given as a goal as it should have been, but it lifted everyone and they were dominant in the second half against a Manchester City team that have been blowing teams away.
"So I'm sure that Alan Pardew will be proud of how they played but it's another win for City."
The Premier League leaders were indebted to a fine save from Hart from Loic Remy on 70 minutes, though, when they still held only a 1-0 advantage, the goalkeeper blocking a low shot with his left foot.
"It was a very important save," said Hamann. "Newcastle started playing better after the goal was disallowed - for the next 50-60 minutes they were the better side without really threatening apart from one Yohan Cabaye shot and that Remy chance.
"Hart came back into the side a few weeks ago and since then he has not looked back. He has been in the outstanding form he was in when they won the league a couple of years back and it's great to see him do well.
"The defence really won the game today because the back four and Joe Hart were outstanding. This isn't something we've said a lot in recent weeks and months."
City wrapped up the points - and top spot in the Premier League - when Alvaro Negredo raced through to finish a one-on-one chance against Tim Krul.
But City boss Manuel Pellegrini faces an anxious wait on the fitness of Samir Nasri after the midfielder left the ground wearing a knee brace with suspected ligament damage, sustained in a 75th-minute challenge with Mapou Yanga-Mbiwa.