Victory over West Ham United on Sunday will see the Reds climb back to the top of the Premier League table ahead of their match with City on Sunday.
Kompany has insisted that he is not surprised by Liverpool's position based on the performance they gave in losing 2-1 at Eastlands earlier in the campaign, but does feel that they have benefited from not having European or domestic cup competitions to distract them from their league form.
"They are the strongest team that we have played this season," he said while appearing as a pundit on Match of the Day. "They have a great squad and are not there by luck.
"We have different styles but the same philosophy of trying to score goals so I think it will be an entertaining game. It is hard to predict because so much is at stake, but we remember the game that we played at the Etihad and I am not surprised at all [that they are challenging for the title].
"Our strongest part of the season when we won the league [in 2011-2012] was when we had no other competitions to play in, and Liverpool have had that this season."
Liverpool will have finished the season having played 43 matches compared to City's 57.