One of the most common techniques for archaeologists working today trying to find archaeological sites in a region where we don't know a lot about where they might be is to ask the locals. For the most part, they tend to know where the archaeological sites are. Especially shepherds or other people who spend a lot of time outdoors since they just stumble on them in the course of their profession. Certainly there are a lot of archaeological sites that are completely buried, but more often than not there is at least some indication above ground that there is an archaeological site below. There have to be really exceptional geological occurrences to completely bury an entire city or village, especially in only a few thousand years. If walls and other buildings are still standing, odds are good at least part of those will still be above ground. The same would be true in the past, and perhaps even more so since a lot of the ruins would be "younger" a thousand years ago and wouldn't be as buried as they are today.

Edit: I generally think we should be pretty charitable to people in the past - they weren't stupid and could make the same observations we could, including recognizing a ruined village or city. They also knew very well the places they lived and so these types of ruined locations would be part of their knowledge about the places they lived, just as much as they knew about the best hunting locations or were the good spots in the woods were to have a secret conversation. They might even have local history (perhaps passed on orally) about those locations.