Playmaker Grealish is yet to consistently hit top form for the Premier League leaders since arriving for £100million from boyhood club Aston Villa last summer.
The England international, who has managed only two top-flight goals and a couple of assists this term, was unable to inspire City to victory on the south coast as their remarkable winning run ended at 12 games.
He cut a frustrated figure at times and was involved in a first-half flash point with Saints midfielder Oriol Romeu after being on the receiving end of a painful challenge from Jan Bednarek.
However, City manager Guardiola was delighted with the 26-year-old’s contribution.
“It was the best game he has played since he has been with us, by far,” said the Spaniard.
“It was an exceptional performance, he played really, really well.
“He played like this (with frustration) but it’s for the referee, for the opponent, it’s his behaviour.
“But I’m talking when we don’t have the ball, what he has done, and when he has the ball and what he has to do.
“They defended so narrow, it is not easy.
“I think he’s the perfect player to play in between the lines, he’s so aggressive, he makes incredible runs, he dropped the Southampton team to the byline.
“His decision-making is excellent, he had two almost clear chances to dribble and shoot but it was blocked. I am so satisfied with the performance Jack has done.”
Southampton boss Ralph Hasenhuttl revealed Grealish waited in the tunnel for Romeu after the final whistle.
Grealish petulantly pushed his Spanish opponent in the chest on the pitch after being antagonised following Bednarek’s foul.
Saints led at that stage courtesy of Kyle Walker-Peters’ early opener before Aymeric Laporte equalised for City with a 65th-minute header.
Kevin De Bruyne and Gabriel Jesus then each struck the woodwork, while Raheem Sterling squandered a golden chance for a first-half leveller, prior to being replaced for the final half an hour.
Guardiola refused to criticise England forward Sterling, who has started only 13 of City’s 23 league fixtures this campaign.
“He missed the chances, which happens in football, but he gave everything,” said Guardiola.
“He played really well the last games.”
City do not return to top-flight action until Brentford’s visit to the Etihad Stadium on February 9 due to an international break and an FA Cup fourth-round tie with Fulham.
Guardiola urged his players to make the most of the break.
“Now, there is no message,” he said.
“Enjoy the holidays, they deserve it and when they come back we will start again with training and put the team in the best condition possible.”