Xavi, who gave Yamal his first-team debut at Barcelona, recalled spotting his talent as a 15-year-old during a difficult financial period for the club.
"We saw him at 15 years old. It was a time when, financially, we were struggling at the club. You have to bet on homegrown players. We saw that Lamine was different at 15. From there we brought him up to the first team. When I saw he was ready, which was from day one, we put him out to play.
"He understands everything, he always makes the right decision. He is the different footballer Spain has. He is a blessing. He has everything to become the best player in world football," Xavi said.
He extended his praise to the wider group of Barcelona graduates now shining for the national team.
"He's a genius, perhaps there has never been such a different player in Spain's history. And look how Cubarsí is playing too. I feel for Fermín, but there's Pedri. There's a generation at Barça, carried over to the national team, for ten or fifteen years, that I'm very proud of, because we saw them grow during our time as staff at Barça," he said.
Reflecting on Spain's 2-0 semi-final win over France, Xavi called it the standout performance of the tournament.
"I think it's Spain's best match of this World Cup. It was an ode to football. It's been years since I saw a team so solid, so good in attack and defence. And against France as well, who were the strongest team at that point," he recalled, adding that the current squad reminds him strongly of Spain's World Cup-winning generation of 2010:
"It's the moment. It's the coach. It's the players. It's the generation. They have built a team that is exceptional at every level. There aren't many egos. It resembles our Spain of 2010 a lot. I'm positive that it can happen again."
Xavi also spoke about his friendship with Argentina captain Lionel Messi, Spain's opponent in Sunday's final.
"I consider him a friend above all, I have a very good personal relationship with him. And beyond that I have no words to define him. I tell him: 'I don't know what to say to you anymore.' We are left speechless by a person who has that humility to keep competing, he's a competitive beast. And he has known how to play the role of spiritual leader for his team very well," he said.
Xavi also revealed he would like to manage a national team in the future, citing the family life it would allow him compared with club management.