The film sees Sutherland play Bradley Mack, a failed Hollywood action star who takes on a role in a small English village's eccentric production of Cinderella.
Here he encounters a number of local characters, one of which is the straight-talking choreographer Jill, played by Rebel Wilson.
The Canadian actor said the comedy would give American audiences a taste of the quintessential British tradition and said it had also showed him what starring in a real-life panto would be like.
"It's something I enjoyed a great deal," he said.
"I also felt it was so reflective of a larger sense of British humour, which I enjoy immensely.
"So yeah, I think I understand what a panto is now but I'm always willing to learn more."
Known for his iconic role in the 1987 cult classic film, The Lost Boys, the actor described the town as "looking beautiful" during filming in January and February.
The cast and crew were spotted in areas like Castlegate, Riverside, and Green Dragon Yard, causing much excitement from residents and businesses.
Chris Foggin, the film's director, described Knaresborough as the ideal "chocolate box" location for the movie.
He said: "I'm not just saying it, but the success of being able to make this film is because all the businesses allowed us to be there and the residents were brilliant."
Although Tinsel Town will be officially released on Sky Cinema on Friday, Knaresborough's Frazer Theatre will host an exclusive early screening on Tuesday for those who managed to snap up tickets for the free event.
The theatre said it was "thanks to the efforts of a local resident" that Sky had given them permission to show the movie.