The fading Barclays Premier League champions take on Manchester United on Sunday having unexpectedly fallen behind their arch-rivals in the table.
For most of the season City, if not looking like mounting the strongest of title defences, at least seemed destined for a top-two finish.
That is now far from certain following a dramatic slump in fortunes while United, ordinary for much of the campaign, appear to have clicked into gear in the last month.
With just a point separating them in third and fourth, the stage is set for a battle of high intensity.
Pellegrini said: "It is difficult to have a more intense match than you have in the Premier League every week but of course you add a little bit more for a derby of the city
Both teams want to win.
"It is important to be the winning team in the city - that gives an extra plus for the game, not only intensity is better but quality.
"Both teams have very good players and both managers like to play an attacking system so I hope (for a good game for) the fans, for whom you play, and after that I hope we can win."
City have held the edge over United in recent contests and could register a fifth successive derby win for the first time in their history with victory this weekend
A win would also see them become the first club to beat United five times in a row in the Premier League.
United had the last laugh over City after the first of their current sequence of derby wins by winning the league in 2013 but since then the blues have had the bragging rights.
Pellegrini said: "I think that they have a lot of respect for our team because last year it was the team that dominated not only the derby but I think we dominated also the Premier League
It is not easy for a team.
"In the last three years we won two and in the other we were runner-up
This year we have been runner-up the whole year.
"We have to play seven games more and we will see what happens at the end of the season and in which position we will stay, but I think for them, they must try to beat the team that has been better in the last few years."
City are likely to come up against an altogether different opponent than the Crystal Palace side that frustrated them last Monday.
Louis van Gaal's United have been fluid of late, winning impressively against Tottenham, Liverpool and Aston Villa to take their run of victories to five.
Facing a side that is not inclined to sit back could suit City but Pellegrini is dismissive of suggestions that might make it easier than in their most recent away losses at Palace and Burnley.
The Chilean said: "You never know but I don't think it will be easy
It will be different.
"United are a big team that like to play - especially with van Gaal
He's always an attacking manager
We hope we will see a good game.
"We have a different problem, we have to make sure we don't make mistakes because they have important and technically very good players."
Despite a wretched run of just four league wins in 11 games since pulling level at the top with Chelsea on New Year's Day, Pellegrini maintains all possibilities remain open to his side.
"I never think in a negative way," said the 61-year-old, who will await the outcome of a fitness test on captain Vincent Kompany's hamstring injury.
"I don't think of one, two or three points difference when you have to play seven games.
"When you have mathematical options in football you must never give up and always believe you can do it."
Source : PA
Source: PA