He said that the biggest challenge for Kiyani is coping with the mounting insurgency in the northwestern frontier province, the problems in Balujistan and the political turmoil.
But Musharraf, who seized power in a bloodless coup in 1999 and has since become a key US ally, will face further pressure at home and abroad to lift emergency rule ahead of the elections set for January 8.
His resignation from the military meets a key demand of the international community who had, until recently, supported Musharraf as long as he fought al-Qaeda and the Taliban.
George Bush, the US president, and other Western leaders have called on Musharraf to step down as army chief, lift the state of emergency, restore the constitution and release political detainees.
Condoleezza Rice, US secretary of state, said that Musharraf's resignation was a good first step but that he should now lift emergency rule.
Rice said: "This is a good step, a good first step in president Musharraf carrying out his obligation, indeed his promise to take off his uniform.
"But the decision now needs to be taken to end the state of emergency to allow free and fair elections to take place."
How Musharraf fares politically, without his military role, depends on the continued backing of Kiyani and the strength of Pakistan's opposition parties.
"Musharraf is going to be far more vulnerable than he has been to this point," Farsana Shaikh, a Pakistani analyst at Chatham House, the London-based think-tank, said.
"He certainly risks facing an unruly parliament which may well decide to take revenge."
Nawaz Sharif, a former Pakistani premier, who Musharraf ousted eight years ago, and Benazir Bhutto, another former prime minister, are both vying for the position ahead of next year's elections.
The two are considering a boycott of the polls if they take place under his imposed emergency rule.
Musharraf imposed the state of emergency citing rising Islamic militancy and an unruly judiciary.
Critics claimed that he wanted to purge the supreme court of hostile judges to ensure that they would not overturn his victory in last month's presidential election.
Sharif and Bhutto, both of whom have served two terms, have vowed never to serve under Musharraf in a future government.