The Potters battled back from 3-0 to reduce the deficit to 3-2 early in the second half at the Etihad Stadium on Saturday, only for their opponents to score four more goals without reply.
Butland picked out the two Manchester clubs as most likely title contenders at the start of the season and what he witnessed last weekend has only reinforced his opinion.
"We got a good result at home to Manchester United (a 2-2 draw on September 9) and I thought our performance against United was much better than against City at the weekend," Butland told Sky Sports News.
"They were incredible. It just seemed like everything they did worked. With the players they have got, if they can play to that level on a consistent basis, they will be difficult to stop."
Stoke return to Premier League action by taking on struggling Bournemouth at the bet365 Stadium on Saturday.