City will face Bundesliga champions Bayern Munich in the group stage for the third time in four seasons, along with CSKA Moscow and Serie A side Roma in Group E.
Pellegrini feels that his side have been handed a tougher task to reach the round of 16 than Arsenal - who will face Borussia Dortmund, Galatasaray and Anderlecht - despite winning the Premier League last season, compared to the fourth-place finish of the Gunners.
He told reporters: "I don't think it's good that the teams who play qualification because they finished fourth in their domestic leagues are in pot one [top seeds], where the strongest teams should be.
"In our group we have three domestic champions, the English champions, the German champions, and the Russian champions. So our group seems a bit unbalanced.
"I think we need to find a modification whereby, for example, all teams who play qualification go into pot four, and all champions of their respective leagues and have a lot of points in Europe go into pot one."
City face Bayern at the Allianz Arena in their Group E opener on Wednesday.