City won the title in the last few seconds of the previous campaign a year after winning the FA Cup. After watching his Blues side lose 3-2 to the champions in Sunday's Community Shield encounter, Di Matteo thinks that City are favourites to defend their crown.
"They are the champions, we have to catch up 25 points from last season. They are favourites, there's no doubt about it," said Di Matteo.
"Manchester United will be chasing City as well. They have a strong squad, I'm not sure if they will make any more signings but they have a strong team."
City start the defence of their Premier League crown against Southampton on Sunday.