Former England midfielder Lampard is due to end his Etihad Stadium loan stint in January and link up with new club New York, after leaving Chelsea last summer.
The 36-year-old's collected finish cemented City's vital 3-0 Premier League victory at Southampton that moves Pellegrini's side second in the table.
The Chilean reiterated City will hold talks with Lampard and Major League Soccer franchise New York before Christmas to find a solution to suit all parties.
"That's why we're going to have to make the best decision for him, for the club, for New York City, for everyone," said Pellegrini, conceding Lampard would not want to desert the champions' quest to retain their title.
"I will continue to answer this question in the same way: we are going to decide in December when we have to make the decision, what will happen with Frank."
Lampard only pitched up at City ostensibly to stay match-fit ahead of his move to New York, part-run by the Manchester club's owners.
Pellegrini has been hugely impressed by Lampard's attitude and influence however, conceding he remains intent on pushing to extend the former England star's stay at City.
"I don't think anyone can find it strange the way Frank Lampard plays football, he knows all what you must do to win in this sport," said Pellegrini.
"Maybe he's not able at 36 to play three games in a row in the same week, maybe he cannot play 90 minutes every game.
"Because he played 90 minutes in midweek that was why it wasn't good for him to start again, but he played a very good 25 minutes and he always makes the difference because he's a top player.
"Frank is not only a top player, he's a great professional also, he's a great professional and a great person.
"He's very happy here in our team, I think that Frank also enjoys the way we play because he makes the difference in the last 25 to 30 metres, so he's very happy here and we're very happy with him."
City leapfrogged Southampton in the Premier League table in a comfortable victory that rammed home the size of Saints' task in clinging on to their early-season top-four berth.
Yaya Toure, Lampard and Gael Clichy fired the goals to secure City's triumph, with the visitors making light of being denied a clear penalty, and also Eliaquim Mangala's red card.
Striker Sergio Aguero was crudely upended by Jose Fonte in the game's first meaningful action, only to be booked for diving.
Pellegrini played down referee Mike Jones' glaring error, before backing his side to move forward and challenge runaway leaders Chelsea for this term's Premier League crown.
"I saw that it was a penalty but I am not the referee," said Pellegrini.
"Sergio never dived, but the referee is human and everyone makes mistakes.
"Maybe if we had drawn 0-0 we would be talking more about this, but we got the result and that's all that counts."
He added: "I think it was the correct decision (Mangala's red card)
"But again, even with 10 men we kept trying to score another goal.
"I think that we can complain about a lot of things from this team this year, that we are conceding too many goals and not scoring as many as last season.
"But the only thing that we cannot complain about in the squad is the spirit, the personality, the character and the ambition to continue winning."
Southampton manager Ronald Koeman admitted his side's lack of attacking acumen let them down ahead of a packed December schedule.
Saints face Manchester United, Arsenal and Chelsea in a December acid test, and Koeman conceded they must improve to stay in the league table's upper reaches.
"In the second half I thought little by little we would create little chances to win the game," he said.
"But it was not good enough.
"It is far harder to create chances against a team like Manchester City: that was not good enough from us, and we got punished for that."
Source : PA
Source: PA