The Sinn Féin politician, who played a key role in making the ceasefire happen, was speaking to UTV ahead of its twentieth anniversary.
"It was the most important decision, not just in the last 20 years which has propelled this peace process forward, but in the last 100 years," Mr McGuinness reflected.
"It has totally demilitarised the situation in the north. It has given people a life."
Northern Ireland was catapulted into a new political reality when, on 31 August 1994, the IRA announced a complete cessation of military operations.
Just weeks later, the Combined Loyalist Military Command also announced its ceasefire.
After 25 years of violence, during which thousands of people have been murdered, the moves brought a fragile peace to NI and paved the way for the Good Friday Agreement of 1998.
I think it was an important measure, I thought the IRA were being brave in terms of the decisions which they were taking
Mr McGuinness said he saw the ceasefire as a "ground-breaking moment in Irish history", but added that he still had some concerns at the time.
He continued: "I suppose I was concerned for, if you like, our own credibility because Gerry Adams and I were the public face of Irish republicanism and we had our own credibility to think of in terms of our own supporters - members of Sinn Féin but also our credibility with the IRA."
When the ceasefire was announced it was greeted with jubilation in west Belfast, but elsewhere there was deep suspicion.
For then-Ulster Unionist leader James Molyneaux and the rest of unionist community a vital word was missing from the IRA's statement - permanent.
John Taylor, the former UUP deputy leader, said: "The word permanent was tremendously important because if it only implied it was a temporary ceasefire, well then people wouldn't trust it at all because they will come back to it. So you did have to have the word permanent.
"If the word permanent was there at least we would take a risk and run with it."
Despite a loyalist ceasefire, a US presidential visit and moves to defuse the decommissioning row under the auspices of US senator George Mitchell, the political process soon began to falter.
Our concern was that we would have embarked on a proposition that would have effectively blown up in our faces
In February 1996 - eighteen months after announcing its ceasefire - the IRA bombed Canary Wharf.
Mr McGuinness said: "I absolutely believe it was over the issue of decommissioning. This was the obstacle that was placed in the road. The IRA was of the view the British government were not serious about seizing the opportunity presented by the initial ceasefire."
The fragile peace was shattered, and it would take another 17 months and a Labour government with a massive majority under Tony Blair before the IRA would call another ceasefire.
However, the former Secretary of State Peter Brooke said the events of 1994 can be looked back upon as a significant stepping stone - and one which had to be taken.
"A lot of problems were being solved in that period," he said.
"The wall was coming down in Berlin, Israel was talking to the Palestinians, in South Africa remarkable things were occurring in terms of the ANC, and it seemed possible to me that Sinn Féin and the IRA might have been concerned if they were going to be the last unsolved problem.
"It was a stepping stone which had to be taken."