Gabriel Jesus and Kevin De Bruyne netted in the final 12 minutes as City beat the Spanish giants 2-1 on a famous night at the Bernabeu.
Guardiola named star men Sterling and Sergio Aguero on the bench while playing striker Jesus on the left wing, and his plan worked brilliantly.
And Keown believes allowing Sterling to come off the bench and change the game was a brilliant tactic from Guardiola.
Writing for the Daily Mail, Keown said: “Manchester City’s comeback was down to the magnificent movement of Raheem Sterling, and this is something the 25-year-old has mastered under Pep Guardiola.
“Sterling was brought off the bench in the 73rd minute. In the 78th, he made an off-the-ball run behind Real Madrid’s defence, before Kevin De Bruyne joined his team-mate in support.
“He crossed, found Gabriel Jesus and bang, 1-1. Then in the 83rd minute, Sterling runs directly at Real from the left wing, forcing Dani Carvajal into fouling him and winning the penalty.
“De Bruyne then found the bottom-left corner for 2-1. What an outstanding substitute’s performance this was from Sterling.
“His movement is first class and that was what gave Real nightmares, leaving City in the driving seat of this tie.
“As the ultimate tactician, Guardiola is someone who tries to push the boundaries, and we saw an incredibly fluid set-up from City here.”
The second leg of the last-16 tie is at the Etihad Stadium in three weeks.