However, the Scot believes that the Gunners are more likely to lift the trophy at the end of the campaign than Manuel Pellegrini's side.
"If you'd asked me at the start of the season, I would have said, 'Yes, Manchester City are title favourites'," Clarke is quoted as saying by Goal.com.
"But, this far into the season, I'd say Arsenal. They look a good team who deserve to be where they are, they've a nice little gap at the top.
"Manchester City will be one of the teams competing for the title but, at the moment, Arsenal are in a good position."
West Brom are currently in 12th place in the Premier League.