The 25-year-old had been struggling with a back problem and it was feared that he could miss the fixture between two of the Premier League's unbeaten sides.
"He's been back on the training field and we're pleased with the progress he has made on his back problem," said Villa manager Alex McLeish.
"Gabby seems to be fine and we just have to watch the load we give him in training. I think the smart money is on him being available against City."
Agbonlahor had been linked with a return to the England squad for the match against Montenegro at the weekend but the injury ruled him out.
The Birmingham-born player has scored four goals in the league so far this season.