Currently below their neighbours on goal difference, the Reds desperately need a result, having lost three on the spin.
"It can be a turning point in the season," Reina told the club's official website. "What better game to do it in than the derby? For the supporters and for us, it is a massive one and I hope the season will turn around from Sunday onwards."
The Spaniard believes the atmosphere will reach fever-pitch on Sunday with new boss Kenny Dalglish embarking on his first home fixture since his shock departure in 1991.
Reina said: "I think the supporters will be more excited than ever because of Kenny, the situation of the team and because it is a derby and we need the three points desperately.
"We need to have them behind us. I'm sure we will, but they have to be conscious that now is the time to get the famous Kop and Anfield behind us because we definitely need them more than any other game."
The 28-year-old shot-stopper is adamant that all the players know the importance of the game, and believes that the squad is beginning to grasp the ideas of the new manager despite falling short at Blackpool in midweek.
"Kenny has told us to trust ourselves, to trust each other and to try and train harder and be more positive," said Reina.
"He knows a lack of confidence is there and we need a couple of positive results, but by doing a great job in our training sessions we will get them.
"He has spoken to all of us together about where we have to improve as a team, told us to stay together and be more compact than ever, to try to trust each other and have confidence things will turn around."
The fixture will see three of its usual protagonists sidelined in Steven Gerrard, Jamie Carragher and Tim Cahill, and the World Cup winner admits that whilst the absence of Cahill is a boost, Liverpool must up their game if they are to succeed without the local duo.
He said: "Cahill's a great player and it's good for us in this case that he's involved in the Asian Cup and won't be on the park.
"But we have to worry about ourselves and when Stevie and Carra are missing, we are a bit weaker. The players know what the game means and all of us will be ready for Sunday.”
On a personal level, the absence of Gerrard and Carragher puts Reina in line to be handed the captaincy by Dalglish.
"It would be a proud honour," he added.
"With Mikel Arteta captaining Everton as well, it will be fun and a great picture of both of us together before kick-off.
"Whenever you are wearing the Liverpool armband, it is a pleasure, honour and a privilege."
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