Ferguson will step down from his role as Manchester United manager at the end of this season, the Barclays Premier League champions announced on Wednesday.
Charlton was one of the United directors who appointed Ferguson in 1987.
The Red Devils boss has since gone on to win 13 Barclays Premier League titles - a feat that Charlton was quick to praise on Wednesday.
"He is such a fantastic manager. Everything he has done has been fantastic," said Charlton at the launch for the Royal Mail's Football Heroes Special Stamps.
"He is a sensational person in every form and I am really delighted for him.
"I am a director but I hardly do anything because we are winning all the time and it is all down to Sir Alex Ferguson.
"He would get up in the middle of the night and travel 300 miles if he thought there was a school boy that he could sign.
"He loves the game and we at the club have had nothing to do really."
The former United striker thinks there were several reasons behind the 71-year-old's decision to call time on his career.
"He has made his decision on various grounds like (because of) his family and because of the hip operation he will have this summer."
Fellow United old boy Bryan Robson was another surprised by the decision of the man he will always call 'the boss'.
"It definitely came as a surprise because I go in to watch training every now and again," the former midfielder said.
"The boss hadn't mentioned anything, not that he would because he does not give too much away. Still, it is a bit of a surprise.
"It would have to happen at some stage and I think the boss must have just felt he has got a lot of grandkids and maybe he wanted to spend a bit more with them."
Robson, who retains close ties with United as a global ambassador, thinks Ferguson will get a say in who replaces him.
"The favourites are up there," Robson added.
"Mourinho gets mentioned all the time and David Moyes has been mentioned for quite a time.
"I think the boss gets on really well with both of them and I am sure the boss will have had a say in where the club do go next.
"The one thing I always believe with Manchester United, and that is why I am pleased to be involved with them, is that they do get a lot of decisions right and I am sure that they will get this one right."
Former Manchester United players took to Twitter to pay their respects to Ferguson.
Cristiano Ronaldo tweeted a picture of himself and Ferguson on the day he Manchester United, adding: "Thanks for everything, Boss".
Dutch striker Ruud van Nistelrooy also tweeted a picture saying: "2001-2006, 219 games, 150 goals under the most successful manager in football history. It was a unique privilege."
Former United keeper Peter Schmeichel has described Ferguson's decision to retire as a "bombshell".
"I'm shocked - I just can't make sense of the timing," he told Sky Sports News. "It has come as a bombshell, I really don't know what to make of it.
"Yesterday [Tuesday] I was really happy with what he had done this season, now this, I'm disappointed and very sad.
UEFA president Michel Platini hailed Ferguson as "a true visionary".
Platini said: "His dedication, his attention to detail and his unique eye for talent, as both the manager of Manchester United FC and Aberdeen FC, has brought rich rewards over a 30-year period.
"He is a true visionary."
The League Managers Association (LMA) added its congratulations.
LMA chairman Howard Wilkinson said: "He is the epitome of the mantra 'Survive, Win, Succeed'. But, in private, with those he trusted, he was the very best sort of friend you could ever wish for. To say his presence on the bench will be sorely missed in no way begins to describe the massive hole he will leave behind. He always said he was too old to retire, let's hope he manages to enjoy the retirement he deserves."
Football Association chairman David Bernstein hailed Ferguson's contribution to the game.
He said: "Sir Alex Ferguson's achievements are truly remarkable - he is genuinely one of the greatest managers of all time and certainly of the modern era."
Premier League chief executive Richard Scudamore said Ferguson's "drive, ambition, skill, passion and vision" have forever altered the landscape of football.
"The Premier League has had the privilege to witness many great players, managers and teams. No one has made as great a contribution to the Premier League than Sir Alex Ferguson," said Scudamore.
Professional Footballers' Association (PFA) chief executive Gordon Taylor said Ferguson would be "the toughest act to follow".
Taylor told Press Association Sport: "The game of football will be a lot poorer place without him. He has been quite simply the best. He followed in Sir Matt Busby's footsteps and even surpassed him.
"He will be also be the toughest act to follow."
Taylor has been PFA chief throughout Ferguson's 27 years at United and he admitted they had clashed on occasion - but that it was soon forgotten.
He added: "I will miss him - he has been a very good friend of the PFA throughout his career,
"Of course at times it has not always been smooth and we have had a difference of opinion but we always respected each other and we have had a lot more agreements than disagreements.
"He is a great football man, he has turned out team after team and in terms of youth development he has been one of the finest exponents of that. He has had a faith and a belief in his youngsters that is rare in today's football."
FIFA president Sepp Blatter, who award Ferguson with a lifetime achievement award last year, said on Twitter: "Just heard Sir Alex Ferguson is retiring at end of season. His achievements in the game place him without doubt as one of the 'greats'."
Sports minister Hugh Robertson also paid tribute, saying: "Sir Alex Ferguson is one of the greatest British managers of all-time and has been an incredible servant to Manchester United, bringing the club unprecedented success domestically and in Europe.
"His enthusiasm for our national game is boundless and I congratulate him on a remarkable managerial career."
Former Liverpool and England striker Michael Owen, who played under Ferguson at United, was surprised at the timing of his decision to retire.
Owen told Channel 4 Racing: "I'm surprised, but everyone's got to retire at some stage.
"I thought he was going to go on for another year or two.
"Anyone in their early 30s and below would have know nothing else other than Sir Alex leading Manchester United out.
"It's an unbelievable piece of news. It's inevitable in many ways, but I didn't see it happening this year.
"He's a phenomenal manager and I'm so proud I can say I played under him for a couple of years."
Gianfranco Zola was part of the Chelsea team which began to challenge United's dominance around the turn of the century.
The former West Ham boss, now in charge of npower Championship play-off hopefuls Watford, said: "I was surprised when I heard the news, but we are talking about a magician so you expect something special to happen.
"It has been a pleasure and a privilege to have had him in front of me, first as a player and then as a manager.
"He is simply the best, there is no other adjective to describe him. He has been outstanding in what he has done.
"I always remember the first time I faced him as a colleague with West Ham, it was quite emotional for me as he has always been someone I looked up to.
"We will miss him, that's for sure, but we can only say thank you for what he has done because it has been remarkable.
"It will be tough to replace him but I am sure he will still be around to help because I know how much he cares about the club."
England rugby coach Stuart Lancaster hailed Ferguson as an example to all young coaches and he believes the Scotsman's his career will never be repeated in any sport.
"What I admire about him most is his longevity and his ability to continually keep his team at the top of the performance cycle," Lancaster said.
"What teams typically tend to do is get to the top of the clock, using the clock analogy, and then they don't change and they start dropping down.
"He has always managed to change and renew his team at the right time but keep the energy, the discipline and culture from within and continue to win.
"When you are doing that week in, week out for 60 games a season it's tiring. And when you do that for 20-odd seasons he must be exhausted. I don't think it will be repeated, his career in sport. I can't see how anyone would go and repeat it.
"I am sure he is getting great plaudits today [Wednesday] and he deserves every one of them because he is a model for all young coaches like me."