The 38-year-old, oldest of the three over-age players in the 18-man squad, is taking part in his first international tournament and will captain the side for the first time when they play Brazil in a warm-up at Middlesbrough on July 20.
"He is been a fantastic professional over the years and he was the standout candidate in a group that has got Aaron Ramsey the Wales captain, and Micah Richards who has captained Manchester City, and one or two other candidates," said Pearce.
"He’s got the respect of the group and the dressing room – I sense that straight away - and he’s got the respect of me and my coaching staff.
"It was a no-brainer. I’m looking forward to working with him, not just as a player, but working in a manager/player scenario.
"Sir Alex Ferguson has been fortunate enough to have him for a number of years and I quite look forward to the next four or five weeks together to see how he flourishes as a captain and as a man."
Giggs has won 12 Premier League titles, five FA Cups and two Champions Leagues with Manchester United and is the most decorated player in English football history.
However, he never played in a major championship because of Wales' failure to reach either the World Cup or European finals during his international career which brought him 64 caps between 1991 and 2007.
"Ryan Giggs is a man playing in his first tournament as an international, which is a crying shame, but this is a great opportunity for him," Pearce said.
Giggs added: "Obviously I have the experience and there are a lot of younger players in the squad, so as captain hopefully I can pass that on to the younger players.
"It's a tremendous honour to be part of the Olympics and I am really proud to be involved. Different nations have got different views about the Olympics, but as a player I am going to enjoy it and try and win it."
Pearce added that he is dismayed at the lack of respect shown to the Olympic football tournament inside the British media.
"I’ve read one or two articles over the last week or so on how football within the Olympics should be taken as a bit of fun,” he said.
“I personally take that as a bit of an insult because I’ve always lived my life as professional sportsman to try and give my best.
“We’ve trained for excellence, and we’ll enter and prepare this team to win gold.
"Playing against Brazil will give us a great indication of where we need to be if we’re going to be successful in this tournament.
“Brazil and Spain will go into this tournament as favourites, with Brazil slightly above Spain even."
The match against Brazil will be the first time Britain have fielded an Olympic squad since they played Bulgaria in a qualifier in 1971 ahead of the Munich Olympics the following year. They last played in the finals in 1960.
Britain face Uruguay, United Arab Emirates and Senegal in their group stage matches.