Full back Cancelo, who joined from Manchester City on an initial loan deal for the rest of the season, set up Eric Maxim Choupo-Moting for the opening goal as Bayern bagged their first win of 2023.
"Joao played very well today. He was very creative, you saw the first pass he made, how he used the outside of the foot. There were two very good crosses to Thomas Mueller. He made a lot of runs from deep," Nagelsmann told reporters.
"I think he tried to sprint 15 times into space. He's done very well. I didn't really have any worries about playing him.
"He's been with one of best managers in the world and he played 160 games under him in the Premier League," Nagelsmann said, referring to City manager Pep Guardiola.
Bayern had drawn three games in the Bundesliga before Wednesday's Cup win but Nagelsmann said he was not worried about their form.
"As for our crisis, I think there is worse crisis than this. It's quite a tough word to use. In general, we didn't achieve the results, which we wanted and we should have done," he said.
