Man City were beaten 2-0 away in Turin to Capello's former club Juventus in the Champions League on Wednesday, with second-half goals coming from Dusan Vlahovic and Weston McKennie.
That extended City's recent form to just one win in 10 games, in which time they have taken only one point from three matches in the Champions League.
The reigning Premier League champions also find themselves eight points behind Liverpool in the title race, having played a game more.
Capello slams Guardiola's style of management
Working on the Juventus-Man City clash for Sky Sport Italia, Capello was scathing in his criticisms of Guardiola, even harking back to times before their current dismal run.
The former AC Milan and Real Madrid boss claimed that the City manager only thinks about his own standing, and prioritises that over the benefit of the team as a whole.
"Guardiola is a great coach, but he is far too arrogant and presumptuous," Capello began.
"At times, he has even lost trophies because he wanted to prove that he was the one winning and not the players, so he dropped key figures from the side in the big games.
"That was, in my view, an attempt to take the spotlight and the credit away from his squad."
Capello links back to Man City's Champions League failure
It is highly likely that Capello was referencing the 2021 Champions League final, where Guardiola's Man City were beaten by Chelsea in Porto.
Guardiola's team selection that day left many scratching their heads, with Fernandinho and Rodri left on the bench, leaving the City midfield very lob-sided.
A midfield three of Bernardo Silva, Ilkay Gundogan and Kevin De Bruyne were overrun by Chelsea, and after going a goal down, they were unable to fight back.
Capello first gained notoriety in management for winning three straight Serie A titles, and then the 1994 Champions League with AC Milan, where they beat Barcelona 4-0 in the final, with a team that prided itself on building solid foundations first, before showcasing their undoubted attacking talent.
The Italian's words on Wednesday, claiming that Guardiola attempts to be too clever for his own good carries plenty of weight, given Capello's standing in the game, but the Man City boss has been adamant that he will not change his ways, despite their continuing run of woeful results.
Man City face bitter rivals and fellow strugglers Manchester United in the derby in the pick of the games in the Premier League this coming weekend.
Written by
Andrew Delaney