Giggs has brought an end to his playing career in order to focus fully on his new role in the dugout and Phelan believes it is only the start of great things for the Old Trafford hero.
Phelan told BBC Radio Five Live: "Ryan is Manchester United through and through, and today is a day of condolences as well because he has actually retired from playing at the ripe old age of 40.
"His career has been magnificent but he can now focus on the next phase of his career which is hopefully coaching and managing.
"He definitely has experience on his side and he has the name and the clout behind him because of who he is and what he has achieved.
"I think (Premier League management) is the natural progression for Ryan, and I think it will happen in the next two or three years."
FIFA president Sepp Blatter paid tribute to Giggs via his official Twitter account
Blatter posted: "Ryan Giggs has retired
Remarkable career by a loyal, legendary @ManUtd entertainer
963 games
34 trophies
1 club".
Source : PA
Source: PA