Sancho came off the bench as Dortmund suffered a 1-0 Der Klassiker loss on Tuesday in a huge blow to their title chances.
The 20-year-old England international has been linked with a move away amid reports Bayern and several Premier League giants are interested.
Flick was asked about Sancho after Bayern's win and was full of praise for the attacker's quality.
"I don't like to talk about players who are under contract to other clubs," he told a news conference.
"I can say that Jadon Sancho has a high quality but in the end he also does Borussia Dortmund very, very well."
Flick added: "He is a great talent and has enormous qualities. That's why you simply have to acknowledge that Dortmund has a very good player there."
Sancho has scored 14 goals and provided 16 assists in 26 Bundesliga games this season.