Manuel Pellegrini started midfielder Fernandinho and attackers Sergio Aguero and Jesus Navas on the bench on Saturday but denied that his side are prioritising their group-stage matches, which begin away to Viktoria Plzen on Tuesday.
However, Hughes told reporters of his former club: "I think their progression is there for everyone to see.
"They've won the FA Cup and have gone on from that to winning the Premier League but the one thing that they have not been able to make any progress in is the Champions League.
"I suppose that's the basis on which they will judged by this year because of their lack of success in it. It's probably the one stick that people can use to hit them over the head with so they will be looking to do better in the Champions League this year, I'm sure."
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"It's a task we have to take good form into. We can't be out in the group stage again. It's a special tournament but not more important than the Premier League."
Meanwhile, City midfielder James Milner acknowledged his team's poor start but believes that they will improve after time spent training togerther.
"We'd like to have a few more points. In the first game we played well, setting our standards high, and since then we haven't quite hit those, for whatever reason," he admitted.
"We have a new manager and new players coming into the club, so it will take time for everyone to get on the same page. Every manager is different and has their own style, so the team has to keep improving and working hard to perfect his way of playing.
"But the longer time we spend together and the longer we play together, the better. We have that opportunity now over the next few weeks before the next international break."