The Germany international is full of respect for Wednesday's opponents, but believes the Blancos can emerge victorious with the right approach
Los Blancos currently sit second in Group D with seven points from four games, while City is bottom of the group after picking up just two points.
"City have fantastic players and they are all capable of being match-winners. It doesn't matter who plays. We'll need to be very focused to try and contain them. They're among the best in the world," Khedira was quoted as saying on the Bwin website.
"Dortmund showed us that it's possible to challenge City in Manchester, playing a compact game, fighting for every ball and trying to play your natural game.
"We shouldn't allow ourselves to be influenced by our opponent, we need to dominate the game with our attacking potential."
Madrid recorded a 3-2 win over City at the Santiago Bernabeu earlier this campaign.