Manuel Pellegrini's men can reclaim top spot on Monday evening and open up a six-point gap to the Blues with a win over Jose Mourinho's men at the Etihad Stadium
The Icelander believes Manuel Pellegrini's men, who have won 18 of their last 20 matches in all competitions, have what it takes edge Spurs' London rivals and claim their second top-flight triumph.
City are currently two points adrift of leaders Arsenal, and meet Chelsea for the chance to regain top spot on Monday.
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"If I were to guess, I think City would be favourites for it," he told the London Evening Standard. "The other two clubs have fantastic squads and fantastic teams but I think with the experience and the players they've got, City will be the side who edge it out of those three."
Tim Sherwood's Spurs slipped to sixth after a 1-1 draw against Hull City at the weekend, following up a 5-1 hammering at the hands of the 2012 champions, but Sigurdsson remains confident the White Hart Lane outfit can finish in the top four and be competitive in the Europa League, in which they will face Dnipro Dnipropetrovsk in the last 32.
"We have the squad to cope," he continued. "It was a big disappointment to go out to Basel last year and, hopefully, we can go a bit further this season.
"The squad are even stronger now than this time last year and the new players are starting to settle in.
"The return of injured players [Jan] Vertonghen, Sandro, Paulinho, Younes Kaboul and Andros Townsend will make the squad even stronger.
"Even though the City result was a setback, we'd done well in the games before that.
"When a new manager comes in, it can freshen the place up, so it's not surprising that we've been doing well [since Sherwood replaced Andre Villas-Boas in December]. The staff are very good now so we just want to forget the City game and build on what went before.
"By the end of February, we'll have a better idea of who will be at the top and who will be competing for fourth place.
"We need to make sure we go on another run and hopefully that will ensure we're in the top four at the end of the season."