Pellegrini's side are currently fourth, six points behind leaders Arsenal, but the Chilean believes that even Manchester United in ninth are still in the race.
"We need to be at least three points near the top," Pellegrini told reporters. "All the teams, especially if we win, will be near us. There are six or seven teams fighting for the title.
"[United] have good players and manager. They have the second half of the Premier League to play and a strong team like them will always have chances."
City host Arsenal in Saturday's early kickoff.