Hughes was sacked from his job as City manager last weekend and Keane believes the Welshman was wrong to to there in the first place due to his history at Manchester United.
Hughes have made over 300 appearances for United in two spells.
“Sparky? I’m disappointed for him of course I am,” Keane told Sky Sports News.
“I think when you’re involved with a club like United, as Sparky was over his career you shouldn’t go to a club like City.
“I think you should try and get employment somewhere else. I think Sparky is probably better off.
“Hopefully he’s enjoying his break and he’ll come back because he’s a top manager. He did a great job at Blackburn and Wales.
“He’ll go on to be a top manager no doubt about that, but he’s probably better off out of City.”
