Ralls was handed a yellow card for a studs-up tackle on the knee of Gundogan, although replays suggested that the Bluebirds player should have received a straight red.
Gallagher has acknowledged that the referee had made the wrong call, describing the challenge as "not a nice tackle".
"It did warrant a red card and there's no doubt about it, it's not a nice tackle. He's seriously endangering Gundogan's welfare," Gallagher told Sky Sports News.
"For whatever reason, Michael [Oliver] hasn't realised. Whether he is on top of it and hasn't got a view of how far he's come or the speed, I don't know.
"He'll look at it this week and look at the root cause and remedy. How did you arrive at this decision and how can we make sure that, if this decision happens again next week, it is dealt with better? It's not just for Michael, it's for everybody."
Man City eventually registered a 5-0 victory in South Wales.