Portugal international centre-back Alves became Caixinha's first signing as Rangers boss last week.
And McCarthy, who was at Porto when Alves was breaking through, insists he will prove a shrewd capture.
"He'll bring something different to Rangers and beef up their defence, so he's the right defender to bring in," McCarthy told BBC Scotland.
"Bruno has a wealth of experience, he's played at the highest level and he's a winner.
"He'll give them a bit more stability at the back, more bite, he's a leader and he'll organise that defence. His communication won't be a problem because his English is very good.
"Bruno is very composed and calm on the ball so he will help the way the manager wants to play things from the back. Bruno is the perfect fit for what the manager is trying to bring to Rangers right now."
As impressed as McCarthy is by the signing of Alves, he reckons Rangers will have to bring in a few more players of a similar calibre before they will be in a position to seriously challenge Celtic.
Brendan Rodgers' side finished 39 points ahead of the Ibrox outfit as they won the Premiership and went on to secure an unbeaten domestic treble.
"I'm not too sure he'll be able to change that because Celtic are so strong," McCarthy said. "It's going to take more than one Bruno Alves in that Rangers side to take the title from Celtic, but if they sign a couple more players like Bruno, then I think Rangers are in with a shout of giving Celtic a run for their money."
Alves began his career at Porto and had various loan spells before becoming a first-team regular, winning nine major honour with the Dragons.
He joined Zenit Saint Petersburg for £18m in 2010, with whom he won two league titles and the Russian Super Cup before joining Turkish giants Fenerbahce for £4.5m in 2013.
There he won one league title and the Turkish Super Cup and then in 2016 he moved to Italian Serie A side Cagliari, from whom he joined Rangers.
Part of the Portugal squad that won the European Championships in 2016, Alves has 89 caps for his national side, and McCarthy is convinced the defender has a lot more football left in him, despite being 35 years old.
"He's a fitness fanatic and looks after himself exceptionally well so that will keep him going for a few years," he added. "The experience that he'll bring, Rangers really need it from what I've seen last season."
And the South African has assured Rangers fans that while Alves is the type of robust defender they need, he will not be a regular in the notebooks of Scotland's referees.
"Everybody has a bit of temper in him but Bruno will choose his moments wisely, he's a senior player in that squad and he has to be an example," McCarthy added.
"He can't do silly things that leave the team hanging because they will depend on his experience and to guide the young players. I don't think he'll end up in hot water too many times but he'll bring some fight to that Rangers defence."
Benni McCarthy says his former Porto team-mate Bruno Alves is the perfect fit for Pedro Caixinha's Rangers.