Phelps was trumped in his specialist event the night he became the most decorated Olympian of all time, winning his 19th Olympic medal.
Le Clos described how he pretended to be Phelps - his childhood hero - over the final lap to win his first Olympic gold medal.
“Watching all of Michael’s races, I knew he finished strong and he used his last underwater to his advantage,” Le Clos said.
“It sounds crazy but I actually thought I was Michael that last turn, I just remembered how he did it.
“When I turned, I looked at him, and it was like a trigger point where I just felt I could try and do something special here.
"The last 25 metres it actually felt like it was in slow-mo.”
For some time, the 20-year-old had been described as the next Phelps and, on Tuesday night, he showed his potential for greatness.
Le Clos said he had dreams of emulating his hero, ever since Phelps won six gold medals at the 2004 Athens Olympic Games - when Le Clos was 12.
“The race for me was more than an Olympic final," Le Clos said.
"Ever since the 2004 Olympics, watching Michael Phelps win the six gold medals in Athens, he’s always been an inspiration to me and a role model
“To be next to him in the final was an honour in itself.
"I just wanted to try and beat him and, in that last 25 metres when it actually happened, I couldn’t really believe it because it was like a dream come true.”
Le Clos’ epic victory was similar to that of Phelps, in the 2008 Beijing final, where he touched first before Serbia’s Milorad Cavic, by 0.01 of a second.
The irony of losing to Le Clos by 0.05 seconds was not lost on the American as he praised the South African for his efforts in unseating him.
“Chad was there at the right place at the right time and he got his hand on the wall first,” Phelps said.
“He is a very good competitor, a very hard working kid, a very hungry kid.”
Le Clos believed he got the rub of the green beating Phelps by the smallest of margins.
“To be honest, I think I was really lucky on the finish -- I had a perfect touch and I couldn’t have asked for better,” he said.
The South African said he hoped he could inspire a generation in the way Phelps has done since he had made his Olympic debut as a 15-year-old at the 2000 Sydney Olympic Games.
“The legacy that he’s left behind for swimming is fantastic. He’s changed the way people around the world view swimming,” Le Clos said.
“Hopefully one day I could try to do something similar and be a role model for younger kids like he was for me.
“He is definitely the greatest Olympian of all time."