''He is the most difficult batsman I have ever bowled to and the finest player of spin,'' Kaneria said of Lara who made 61 and 122 in a match Pakistan won by nine wickets on Tuesday.
Lara, Test cricket's leading scorer with 11, 688 runs in 129 matches, blasted his 33rd century to follow scores of 130 and 153 against Pakistan last year in the Caribbean.
Kaneria helped Pakistan win the second Test in Jamaica after bowling Lara around his legs for a duck in the second innings.
''I have bowled against all the top batsmen in the world but Lara is exceptional, no doubt about that,'' Kaneria, who has enjoyed success against India, Australia and England, told Reuters.
''Bowling to him is a big challenge because he prompts you to raise your game and level of skills. He is one batsman who even punishes a good ball,'' Kaneria said.
The 25-year old, only the second Hindu to play for Pakistan, took just three wickets in the first Test but has taken his overall tally to an impressive 172 in 41 matches.
He has struggled in his last 10 tests by his own standards, taking 29 wickets despite being described as a key bowler by his captain Inzamam-ul-Haq.
''I tried giving little width to Lara and bowling a bit quicker to him to give him less time to play his shots. But he adjusted very well to the pitch which was slow and had low bounce,'' Kaneria said.
''He raises his game according to the challenge. His adjustment is phenomenal,'' he added.
Kaneria said Lara had lifted his spirits after the game by saying to him, ''Well bowled little master.''
''It is such praise which qualifies you to become a better bowler,'' Kaneria said.
Inzamam thinks Lara remains a threat to his team's chances of winning the series.
''He has got a lot of runs against us and we keep on discussing plans to restrict him. But it is never easy against his class,'' Inzamam said, adding that Kaneria could have had greater rewards in the first Test.
''He bowled very well and I think he was desperately unlucky. He picked up important wickets in the first innings and in the second he was good, just not very lucky.'' ''He remains our key bowler but we can't expect him to take wickets every time,'' he added.
The second Test starts in Multan on Nov 19.