The Eagles have struggled in the tournament in recent years since reaching the semi-finals in the 2011-12 campaign and will be focused on taking the scalp of the Citizens.
City put in a dominant display in the third round to coast past Sunderland at the Stadium of Light to seal their place in the fourth round with an emphatic 4-1 victory.
City's impressive start to the campaign was ended by those defeats, which had the potential to send the club on a downward spiral, but comprehensive 6-1 and 5-1 victories over Newcastle United and Bournemouth ensured that they remained top of the table.
The team strengthened their position at the summit when they put in a solid display against rivals Manchester United to earn a 0-0 draw from the clash, despite being at their best at Old Trafford.
The Chilean and his side will have set their sights on regaining the Premier League crown and winning the Champions League, but a trophy win in the competition could ease the pressure on the Citizens going into the end of the campaign as it did two seasons ago.
City will head into the game with confidence following their impressive home form at the start of the campaign, as only West Ham and Juventus have won at the Etihad Stadium this season.
Recent form: W
Recent form (all competitions): LWWWWD
Palace's bright start to the season has been halted by back-to-back defeats to West Ham United and Leicester City, which have dropped them out of the top four into seventh place in the Premier League.
It has been a case of hit or miss for Alan Pardew's men in the campaign as they have either won or lost their 12 fixtures in all competitions, winning seven of the games, including two in the Capital One Cup.
The Eagles' strength under Pardew has been their form on the road as they have won nine out of their 13 matches away from Selhurst Park under the tenure of the 54-year-old, including their trip to Stamford Bridge in a 2-1 win over Chelsea earlier this season.
As a result, Palace will travel to the Etihad Stadium with plenty of confidence that they can take advance to the fifth round of the competition, despite their drop in form since the return from the international break.
The Eagles have never won the League Cup and have struggled to reach the latter stages over the past few years, failing to reach the fourth round of the competition since the 2011-12 campaign.
However, Palace have reached the semi-finals on four occasions since the 1990s, but never managed to progress into the final, including their defeat to Cardiff City in 2012 on penalties.
There is enough motivation for Pardew and his men to make a strong fight in the competition, continuing against the Citizens following their success against Shrewsbury Town and Charlton Athletic in the previous rounds.
Recent form: WW
Recent form (all competitions): LWWWLL
City are still without Sergio Aguero (hamstring) and David Silva (ankle) due to injury, while Pellegrini will also be without the services of Fernandinho, who picked up his fifth booking of the season against United earning him a one-match suspension.
Wilfried Bony is expected to lead the line for the Citizens, but Kelechi Iheanacho could feature following his match-winning strike against the Eagles earlier this season. Manu Garcia and Patrick Roberts may also come into contention for City on Wednesday.
Samir Nasri has returned to training this week, but the game may come too soon for him to return to the pitch.
The Eagles are without left-back Pape Souare so Adrian Mariappa will continue in his place, while forwards Connor Wickham and Marouane Chamakh are still out due to injury. Wilfried Zaha could return to the starting lineup after starting on the bench last week.
Manchester City possible starting lineup:
Caballero; Sagna, Kompany, Mangala, Kolarov; Fernando, Garcia, Toure, Roberts, De Bruyne; Bony
Crystal Palace possible starting lineup:
Hennessey; Mariappa, Dann, Hangeland, Kelly; McArthur, Cabaye; Puncheon, Zaha, Bolasie; Gayle
Head To Head
The two sides met earlier this season when Iheanacho struck in the 90th minute to hand City a 1-0 victory at Selhurst Park.
Over the course of history, City have fared better in the contest by securing 25 victories compared to Palace's 15, while 12 of the matches have ended in draws.
We say: Manchester City 3-1 Crystal Palace
Pellegrini's men have been in imperious form at the Etihad Stadium of late and will be looking to fire in front of goal after drawing a blank in the Manchester derby. Palace have an impressive away record under Pardew, but City will have enough quality in the final third to take their chances to put the game beyond the reach of the Eagles.