When it comes to praising people, it is virtually a mitzvah to praise the deeds of righteous people. Others will hear it and then learn to do the same. But this has to be weighed carefully so that the mitzvah does not turn to the opposite. For instance, when praising someone in their presence it could lead to haughtiness, and then the person praising has violated “Do not place a stumbling block before a blind man.” Or if he says the praise in front of the person’s enemy, then it is the “dust” of lashon ha-ra because it could easily turn from praise into his disgrace. Likewise, one must be careful when recounting the someone’s praises in the presence of several people because they might cast an evil eye towards him. Another thing to be careful about when praising someone is that it not lead to any loss or damage to the other fellow, for he certainly would not want that praise. This is similar to what is written, If one blesses his friend loudly from early in the morning, it will be considered a curse to Him (Mishlei 27:14).
Occasionally it is proper to praise someone directly for his good deeds, and to tell him about the importance of the mitzvah he performed and about the reward he will surely receive for it — so that the person will become more committed to his good behavior and do even more. But when doing so one should add that the praise should not “get to your head” since this is what we were created for and we can really never fully discharge our duties.
It is proper for a person who receives some benefit from his fellow to praise him and bless his benefactor, both privately and publicly, so as to not be an ingrate. We see that even for a slice of bread our Sages ordained that a guest should bless his host. They said that one who refrains from blessing his host will suffer shortened life, for it is written, And I shall bless those who bless you. And, all the more so, a person who received some extraordinary benefit from his fellow or any kind of concrete gift, whether money or its equivalent, is obligated to bless him, and by doing so one receives blessings as well.
If all this is true with regard to human benefactors, how much more so should we praise and bless Hashem. For everything is from Him and even when other people extend to us, they are actually His messengers. There really is no limit to the good and kindness that He does for us daily, constantly. To Him, praise is pleasant and befitting.