"The way he was dealing with the pressure in our match a few days ago, how calm he was all the way until the end, was impressive. He deserved to win the trophy."
Alcaraz hit a career-high ranking of number six on Monday and leads the tour with 28 wins against three losses in 2022.
The 19-year-old has seven top-10 victories this season, more than any other player. He is skipping the Rome tournament so he can be in peak condition for the French Open later this month.
"Everything about his game is really impressive. He's a really complete player, can play equally well offensively and defensively. He's the talk of the sport," added Djokovic of Alcaraz.
"Roland Garros, he's definitely one of the main favourites, no doubt."
Djokovic has missed multiple tournaments this year after choosing not to get vaccinated and arrives in Rome with just 11 matches under his belt (seven wins and four losses).
While he is still searching for his peak form, Djokovic believes his own "level of tennis is really high now".
"My body is like an old machine. To put this machine on again it already takes some time," explained Nadal, who faces John Isner or Francisco Cerundolo in his opening match in Rome.
"It's not the same when you have 19 than when you are almost 36, with all the issues that I went through in my tennis career, no?
"It's more about being confident with my movements, recover the speed, recover the way that I have to play on clay and let's see.
"I am confident that I can play well honestly. I need some time, but maybe this week can be a positive week, maybe not. Who knows?"